When an Entire Business Is Purchased Goodwill Is the Excess

question 234

True/False

When an entire business is purchased goodwill is the excess of cost over the book value of the net assets acquired.

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Definitions:

Good Standing

A status indicating that an entity or individual is up-to-date with the fulfillment of legal, financial, or administrative obligations.

Annual Dividend

An annual dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits on a yearly basis.

De Jure Corporation

A corporation that has fully complied with all statutory requirements for incorporation and is legally recognized.

Conditions Precedent

Specific conditions outlined in a contract that must be met before the contract becomes legally binding or before a party is obligated to perform their part of the agreement.