Goodwill May Be Recorded in Which of the Following Circumstances

question 103

Multiple Choice

Goodwill may be recorded in which of the following circumstances?

• A)When the property,plant and equipment of a business increase in value
• B)When a business earns a very high net income
• C)When a business sells property for more than its book value
• D)When one business acquires another business

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Definitions:

Rate of Return

The rate of return is the gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Dividends Increase

An action by a company to raise the amount of money paid to shareholders through dividends.

Dividend Growth Rate

The annual percentage increase in a company's dividend payouts.

Required Rate of Return

The minimum percent gain on a yearly basis that captivates entities or persons to invest in a certain security or effort.