Which of the Following Income Factors Should Not Be Factored

question 5

Multiple Choice

Which of the following income factors should not be factored into an estimation of goodwill?

• A) sales for the period
• B) income tax expense
• C) extraordinary items
• D) cost of goods sold

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Definitions:

Additional Contributions

Extra payments beyond the minimum required, often referring to retirement accounts or other savings plans.

Cash Distribution

The payment of earnings or assets from a corporation or a financial entity to its shareholders, investors, or partners.

Partnership Income

Earnings distributed to the partners of a partnership from the business, which is reported on their personal income tax returns.

Basis

The amount paid for an asset or investment, used to calculate gain or loss for tax purposes.