Goodwill: Meaning - SS2 Accounting Past Questions and Answers - page 1
What is Goodwill in accounting?
The value of a business's tangible assets
The value of a business's liabilities
The intangible value of a business that is not attributable to its assets, liabilities, or earnings
The value of a business's earnings
When does Goodwill arise?
When a business is sold for a price that is equal to the value of its net tangible assets
When a business is sold for a price that is lower than the value of its net tangible assets
When a business is sold for a price that is higher than the value of its net tangible assets
When a business does not have any tangible assets
How is Goodwill recorded on the balance sheet?
As a liability
As an expense
As a revenue
As an asset
What happens if the value of Goodwill decreases?
It has no impact on the financial statements
It is recorded as an expense on the income statement
Impairment charges are recognized on the income statement
The value of Goodwill on the balance sheet increases
What is the definition of Goodwill in accounting?
Goodwill in accounting represents the intangible value of a business that is not attributable to its assets, liabilities, or earnings.
How is Goodwill recorded on the balance sheet?
Goodwill is recorded as an asset on the balance sheet.