Janet,feeling the Reputation of a Business Is Very Strong,pays $2

question 32

Multiple Choice

Janet,feeling the reputation of a business is very strong,pays $2.5 million for the business even though the assets were valued at $2 million.What is the excess amount over the value of the assets called?

• A) profit
• B) investment
• C) risk value
• D) goodwill

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Definitions:

Activity-Based Costing

A method in cost accounting that assigns costs to products and services based on the activities involved in their production or delivery.

Activity Rates

Rates used in activity-based costing to assign overhead costs to products or services, based on the activities that drive those costs.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate cost information.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing detailed information on where and how costs are incurred.