Which of the Following Is a True Statement About the Accounting

question 59

Multiple Choice

Which of the following is a true statement about the accounting treatment of goodwill?

• A) Accountants start recording the goodwill of a company as soon as the company starts, and adjust the value every year to reflect the changes in the attitudes of the company's customers.
• B) Goodwill is always shown on the balance sheet at its fair value.
• C) When one company acquires another, accountants find the value of goodwill by comparing the amount paid to acquire the company with the net fair value of the assets and liabilities acquired.
• D) Goodwill is never reduced for impairment.

---

Definitions:

Autonomous

Referring to the capability of functioning independently or having self-governance.

Immanent

Existing or operating within; inherent within the physical world or the universe.

Immanent Justice

The belief, often held by children, that moral behavior is always rewarded and immoral behavior is always punished.

Immediate

Pertaining to something occurring or done without delay.