When Josh sold his Internet auction site to eBay, he received $2,000,000 more than the total value of his assets as listed on his balance sheet. How will eBay classify this $2,000,000?
A) Goodwill
B) Reputation
C) Equipment
D) Research and development
E) Retained earnings

Question

Quizplus · Accepted Answer

The $2,000,000 represents the premium price paid by eBay for Josh's Internet auction site, which is considered goodwill. Goodwill is an intangible asset that represents the value of a business beyond its tangible assets and can arise from factors such as a strong customer base, reputation, and intellectual property.

When Josh Sold His Internet Auction Site to EBay, He