The Accounting Process, Part Three - Module 4 of 6

Question 1

Acme Corporation acquires a patent. May it amortize the cost of the patent?

Question 2

Goodwill is

Question 3

Which of the following is TRUE about bonds?

Question 4

Acme Corporation acquires 51% of LabCo’s voting stock. Acme would record LabCo’s income and losses

Question 5

Acme Corporation sells a $1,000,000 bond to raise money for a new plant expansion. The bond is backed by the plant which serves as collateral in the event Acme does not repay the bondholder. This bond is called

Question 6

Acme Corporation leases a lathing machine for $400,000 with an option to buy the asset after three years of payments for $100,000. This “bargain-price option” will allow Acme to list the asset as a(n)

Question 7

Acme Corporation posted a loss this year and would like to use it to reduce its taxes from four year ago. Can Acme carry back its loss?

Question 8

A retirement plan that guarantees a certain benefit to its retirees at retirement is called a defined

Question 9

Linda owns 1,000 shares of common stock in Acme Corporation valued at $40 per share. Acme does a “3 for 1” split and Acme gives Linda an extra 2,000 shares. What is the worth of Linda’s investment in Acme Corporation now?

Question 10

In a partnership agreement, all partners