1- Which of the following is not true about analyzing the collection risk of receivables?
- One needs to determine the portion of receivables that are renewals of prior accounts or notes receivable.
- Customer concentration—risk decreases when receivables are concentrated in one or a few customers.
- One needs to compare the company’s receivables as a percentage of sales with those of the company’s competitors
- Analysis must rely on our knowledge of industry conditions to reliably assess the provision for uncollectibles.
2- Which of the following is not an example of intangible asset?
- Licenses, franchises, memberships, and customer lists
- Special formulas, processes, technologies, and design
- Reputation, privilege and relationship with government
- Exploration rights and natural resource development costs
3- What is one criterion a company uses to decide whether an intangible asset should be recorded on the balance sheet or not?
- Whether it’s inseparable from a company or its segment
- whether it has indefinite benefit periods
- Whether it experiences large valuation changes based on competitive circumstances.
- Whether it’s purchased