How Is Goodwill Accounted for Subsequent to Acquisition

question 29

Multiple Choice

How is goodwill accounted for subsequent to acquisition?

• A)It should be written off as soon as possible against retained earnings.
• B)It should not be amortized because it has an indefinite life.
• C)It should be written off as soon as possible as an expense.
• D)It is amortized over its estimated useful life.

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Definitions:

LMRA

The Labor Management Relations Act, also known as the Taft-Hartley Act, which regulates labor-management relations in the United States.

Unfair Labor Practice

Actions by employers or unions that violate the rights of employees or the collective bargaining process as defined by labor laws.

Union

An organization of workers formed to protect and advance their rights and interests; a labor union.

Office of Federal Contract Compliance Programs

The Office of Federal Contract Compliance Programs (OFCCP) is a U.S. government agency responsible for ensuring that employers doing business with the Federal government comply with the laws and regulations requiring nondiscrimination and affirmative action.