Goodwill
A) may be expensed upon purchase if desired.
B) can be sold by itself to another company.
C) can be purchased and charged directly to owner's equity.
D) should be recorded as an intangible asset and carried on the balance sheet unless an impairment in value occurs.

Question

Quizplus · Accepted Answer

Goodwill is recognized as an intangible asset on the balance sheet and is not expensed upon purchase. It arises from the acquisition of one company by another for a premium value. The value of goodwill is not directly charged to owner's equity nor can it be sold by itself. It remains on the balance sheet at its purchase value until evidence of impairment suggests that its recorded value exceeds its fair value.