Which of the Following Combination Best Demonstrates the Value of Goodwill

question 30

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)
• E) None of the given answers.

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Definitions:

Categorical Variable

A type of variable that can take on one of a limited, and usually fixed, number of possible values, assigning each individual or other unit of analysis to a particular group or nominal category.

Cubed-Root Transformation

A statistical technique used to stabilize variance, make the data more closely conform to a normal distribution, or improve the interpretability of data with skewed distributions.

Log Transformation

A mathematical operation that replaces a variable with the logarithm of that variable to help normalize data or manage skewed distributions.

Arcsin Transformation

A data transformation technique used to stabilize the variance when the data follow a binomial distribution.