Under GAAP

question 195

Multiple Choice

Under GAAP

• A) dividends paid can be either an operating or investing item.
• B) dividends received can be either an operating or investing item.
• C) the income statement uses the headings operating, investing, and financing.
• D) taxes are always treated as an operating item.

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Definitions:

Acquired Goodwill

The excess of the purchase price over the fair value of the net assets acquired in a business combination, reflecting intangible assets like brand reputation, customer relationships, etc.

Impairment

A reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount, leading to an adjustment in the value of the asset on the balance sheet.

Consideration Transferred

The total amount of cash, assets, or other resources given up by an acquiring entity to obtain control of another business in a business combination.

Fair Value

The monetary amount anticipated for the disposal of an asset or the fee for shifting a liability in a coordinated marketplace interaction on the appraisal day.