Goodwill may be recorded in which of the following circumstances?
A)When the property,plant and equipment of a business increase in value
B)When a business earns a very high net income
C)When a business sells property for more than its book value
D)When one business acquires another business

Question

Quizplus · Accepted Answer

Goodwill is the value attributable to favorable factors such as reputation,location,and superior products.When one business acquires another business,goodwill is calculated as the excess of the acquisition price (comprised of the cash paid plus the liabilities assumed)over the fair value of the assets acquired.

Goodwill May Be Recorded in Which of the Following Circumstances