Which of the Following Is the Proper Accounting Treatment for Purchased

question 97

Multiple Choice

Which of the following is the proper accounting treatment for purchased goodwill?

• A)Goodwill must be capitalized when acquired, and amortized over 70 years or less.
• B)Goodwill must be capitalized when acquired, and amortized over 20 years or less.
• C)Goodwill must be expensed when acquired.
• D)Goodwill must be capitalized when acquired, and expensed each year to the extent that the value has declined.

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Definitions:

Unionized Employees

Workers who are members of a union, which is an organization that represents their interests in negotiations with employers.

Open Social Systems

Open social systems are organizations that continuously interact with their environment, exchanging information and resources.

External Environment

The outside forces that can impact an organization's performance, including economic, political, technological, and social factors.

Single Union

A term referring to a situation where only one labor union represents the employees of a particular company or workplace.