Goodwill Arising on an Equity Investment Is Not Required to Be

question 20

True/False

Goodwill arising on an equity investment is not required to be separately tested for impairment.

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Definitions:

Acid-Test Ratio

A stringent test that measures a company's ability to pay off its short-term liabilities with quick assets, excluding inventory.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales by comparing net credit sales with the average accounts receivable.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory.

Current Liabilities

Short-term financial obligations that are due within one year or within a company's operating cycle, whichever is longer.