Goodwill Is an Intangible Asset That Has Special Features

question 24

Multiple Choice

Goodwill is an intangible asset that has special features.Which statement below is true regarding the special nature of goodwill?

• A) Goodwill is recorded in the books of a company as the company creates it.
• B) Goodwill is amortized over a period not to exceed 40 years.
• C) Goodwill is recorded only when it is purchased in the acquisition of another company.
• D) Goodwill is amortized over a period not to exceed 20 years.

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Definitions:

Stocks

Shares of ownership in a company that entitle the shareholder to a portion of the company's profits and assets.

Savings

Funds that remain after an individual's or organization's expenses have been subtracted from its income, which are set aside for future use or investment.

Net Investment

Net investment is the total amount spent on new capital assets minus the depreciation on existing capital assets.

Control

The ability to shape or control the actions of others or the progression of events.