How Is Negative Goodwill Treated in Accounting for a Joint

question 36

Multiple Choice

How is negative goodwill treated in accounting for a joint venture in the year of acquisition?

• A)Included in the investor's equity in the earnings of the investee
• B)Included in the carrying value of the investment
• C)Allocated among the assets and liabilities
• D)Shown as a line item on the SFP

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Definitions:

Imports

Goods and services purchased from other countries, bringing them into the domestic market for consumption or input into further production.

Exports

Goods or services sold by one country to other countries on the international market.

Gold Standard

A monetary system in which the standard economic unit of account is based on a fixed quantity of gold.

Drawbacks

Drawbacks are disadvantages or negative aspects of a situation, plan, or product that may not make it as favorable as it seems.