How Often Should Goodwill Acquired in a Business Combination Be

question 2

Multiple Choice

How often should goodwill acquired in a business combination be tested for impairment?

• A)Whenever there is an indication of impairment
• B)Whenever there is a change in circumstances in the business
• C)At least once a year
• D)At least once every two years

---

Definitions:

Aging Report

A financial report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding.

Allowance for Doubtful Accounts

This is a contra-asset account that reduces the total amount of accounts receivable reported on the balance sheet, reflecting the estimate of non-collectible amounts due to credit sales.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are therefore written off as a loss.

Adjustment

A modification made to financial records to correct or update them.