Which of the Following Is Not True Regarding SFAS No

question 75

Multiple Choice

Which of the following is not true regarding SFAS No. 142?

• A)Goodwill may be defined as the excess earning power of an acquisition.
• B)Goodwill is defined as the difference between the amount paid for an acquired subsidiary and the fair market value of its individual net assets.
• C)Tests of goodwill impairment must be made on an annual basis.
• D)Because goodwill has an indefinite life, it is not subject to write-off as an expense.

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Definitions:

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, often a fiscal quarter or year.

Financial Statements

Reports that summarize the financial performance and position of a business, including the balance sheet, income statement, and statement of cash flows.

Debits

Accounting entries that increase asset or expense accounts or decrease liability, equity, or revenue accounts.