How Is Negative Goodwill Accounted for Under U.S.GAAP

question 16

Multiple Choice

How is negative goodwill accounted for under U.S.GAAP?

• A)There is no rule for negative goodwill, because there is no such thing.
• B)It is capitalized and amortized over a period of no more than 40 years.
• C)It is treated as an extraordinary loss on the consolidated income statement.
• D)It is treated as an extraordinary gain on the consolidated income statement.

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Definitions:

Price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its price, indicating how changes in price affect sales volume.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.

Price Elasticity

A measure of responsiveness of the quantity demanded or supplied of a good to a change in its price, indicating how changes in price affect demand or supply levels.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to buy.