Goodwill Should Be Written Off

question 16

Multiple Choice

Goodwill should be written off

• A) As soon as possible against retrained earnings
• B) When there is evidence that its carrying value has been impaired
• C) By systematic charges against retained earnings over the period benefited, but not more than 40 years
• D) By systematic charges to expense over the period benefited, but not more than 40 years

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Definitions:

Direct Labor

The wages and other costs for labor directly involved in the production of goods or provision of services.

Weighted Average Method

An inventory valuation method where costs of goods sold and ending inventory are determined by taking the weighted average of all units available for sale during the period.

Work in Process Inventory

Inventory that includes goods that are in the production process but are not yet complete.

Equivalent Units

A concept used in process costing that converts partially completed units into a number of fully equivalent units.