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 amount paid above the fair value of Josh's assets, which would be classified as goodwill on eBay's balance sheet. Goodwill represents the value of intangible assets such as reputation, customer relationships, and brand recognition.

When Josh Sold His Internet Auction Site to EBay, He