Goodwill
A)is always expensed upon purchase.
B)can be sold by itself to another company.
C)can be purchased and charged directly to shareholders' equity.
D)is the excess of cost paid to acquire a business over the fair value of the net identifiable assets of the business.

Question

Quizplus · Accepted Answer

Goodwill represents the excess of the purchase price paid to acquire a business over the fair value of the net identifiable assets of the business. It is not expensed upon purchase, cannot be sold by itself as it is not a separable asset, and is not charged directly to shareholders' equity but is recorded as an intangible asset on the balance sheet.