Which of the Following Combination Best Demonstrates the Value of Goodwill

question 44

Multiple Choice

Which of the following combination best demonstrates the value of goodwill?
I.purchase consideration of subsidiary
II.book value of net assets held by subsidiary
III.fair value of net identifiable assets
IV.contingent liabilities

• A) I less II
• B) I less III
• C) I less (II-IV)
• D) I less (III-IV)

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Definitions:

Bank Credit Card

A card issued by a bank that allows users to purchase goods or services on credit, subject to repayment terms and possibly interest.

Sales

The exchange of goods or services for money, constituting the revenue of a business.

Pledging Accounts Receivable

The use of accounts receivable as collateral to secure a loan, without transferring the title.

Promissory Note

A financial instrument where one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.