Which of the Following Statements Is True Regarding Goodwill

question 86

Multiple Choice

Which of the following statements is true regarding goodwill?

• A) For accounting purposes, goodwill may be amortized over a period not to exceed 40 years.
• B) For accounting purposes, goodwill may be amortized over a period not to exceed 20 years.
• C) For tax purposes, goodwill amortization cannot be deductible.
• D) For tax purposes, goodwill amortization may be deductible over a 20-year period.
• E) For tax purposes, goodwill amortization may be deductible over a 15-year period.

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Definitions:

Clayton Act

A piece of U.S. legislation enacted in 1914 aimed at promoting competition among enterprises and preventing monopolies by outlawing certain anti-competitive practices.

Sherman Act

A landmark federal statute passed in 1890 aimed at promoting competition among businesses by prohibiting monopolies and other activities that restrained trade.

Clayton Act

A U.S. law enacted in 1914 aimed at promoting competition by preventing mergers and acquisitions that could significantly reduce market competition.

Tying Contracts

Agreements where the seller conditions the sale of one product on the purchase of another product.