One Year After Acquisition Date, Acquired Goodwill Was Regarded as Having

question 32

Multiple Choice

One year after acquisition date, acquired goodwill was regarded as having become impaired by $10 000. The appropriate consolidation adjustment in relation to the impairment will include the following line:

• A) DR Goodwill $10 000
• B) CR Impairment loss $10 000
• C) CR Accumulated impairment losses $10 000
• D) CR Business combination valuation reserve $10 000

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.

Net Income

The amount of money a company retains after subtracting all expenses and taxes from its gross revenue.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements.