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:

U.S. Dollars

The official currency of the United States, used as a standard unit of money and backed by the federal government.

Brazilian Real

The official currency of Brazil, symbolized as R$ and subdivided into 100 centavos.

U.S. Currency

The system of money in general use in the United States, primarily consisting of dollars and cents.

U.S. Dollar

The official currency of the United States, used as a standard measure of value and a medium of exchange.