Goodwill is the value of a business's favourable reputation and customer loyalty, and is considered an intangible asset on a company's balance sheet. Goodwill is not the same as added value (B) or the process of extending credit (D), and it may not always exist if a business operates poorly or loses its reputation.

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Goodwill

Question 15

Multiple Choice

Goodwill:

A) is essentially a business's favourable reputation.
B) measures the added value of a product.
C) always exists so long as a business operates.
D) is the process of extending credit to needy customers.

Correct Answer: