In the context of a balance sheet, goodwill represents
A) a premium paid over the book value of an acquisition.
B) the value attached to a firm's reputation.
C) the excess of assets over liabilities.
D) the value associated with benefits from environmental programs.
E) the excess of current assets over liabilities.

Question

Quizplus · Accepted Answer

Goodwill on a balance sheet represents the premium paid over the book value of an acquisition, which is the excess of the purchase price over the net tangible assets acquired. It is the value placed on intangible assets such as brand name, customer relationships, and intellectual property.

In the Context of a Balance Sheet, Goodwill Represents