In recording the acquisition cost of an entire business
A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets.
B) assets are recorded at the seller's carrying amounts.
C) goodwill, if it exists, is never recorded.
D) goodwill is recorded as the excess of cost over the carrying amount of identifiable net assets.

Question

Quizplus · Accepted Answer

Goodwill is recorded as the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

In Recording the Acquisition Cost of an Entire Business