When an Entire Business Is Purchased, Goodwill Is the Excess

question 7

True/False

When an entire business is purchased, goodwill is the excess of cost over the carrying amount of the net identifiable assets acquired.

---

Definitions:

Incorporator

The individual or entity responsible for creating and filing the necessary documentation to legally form a corporation with the state.

De Facto Corporation

A business entity that operates as if it were a corporation although it has not completed the legal formalities for incorporation, and may be treated as a corporation by courts.

De Jure Corporation

A corporation that has fully complied with all legal requirements for its establishment, and thus has legal recognition.

Corporation by Estoppel

A legal doctrine that prevents a party from denying the corporation's existence if they have dealt with it as if it were a legal corporation.