Which of the Following Statements Is Correct Regarding Accounting Treatment

question 14

Multiple Choice

Which of the following statements is correct regarding accounting treatment of goodwill?

• A)Goodwill is recorded as an asset and is not written off as an expense unless its value decreases.
• B)Goodwill is recorded as an asset and amortized over 5 years regardless of any change in value.
• C)Goodwill is recorded as an asset and amortized over 40 years unless its value decreases.
• D)Goodwill is expensed immediately in the year acquired.

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Definitions:

Management Success

Often measured by an individual's ability to achieve organizational goals through effective planning, organizing, leading, and controlling resources.

Need for Affiliation

The desire to form close personal relationships and be part of a group.

Friendly Relations

Interpersonal connections characterized by mutual respect, positive regard, and cordiality, often contributing to a positive working environment.

Acquired Needs Theory

A theory that suggests people are motivated by their desire to achieve, gain power, or affiliate with others.