An Inconsistency in Accounting Theory Can Occur Because

question 23

Multiple Choice

An inconsistency in accounting theory can occur because

• A)internally developed goodwill is expensed, while purchased goodwill is capitalized
• B)both internally developed goodwill and purchased goodwill are expensed
• C)internally developed goodwill is capitalized, while purchased goodwill is expensed
• D)both internally developed goodwill and purchased goodwill are capitalized

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Definitions:

Note Receivable

A written promise that a specified amount of money, plus potentially interest, will be paid by one party to another by a specific date.

Maker

In finance, the party that creates or issues a financial instrument, such as a check.

Principal

The original sum of money borrowed in a loan, or the original amount invested, excluding any interest or dividends.

Accounts Receivable

Money owed to a business by its clients for goods or services delivered but for which payment has not yet been received.