Which of the Following Observations Concerning "Goodwill" Is NOT Correct

question 12

Multiple Choice

Which of the following observations concerning "goodwill" is NOT correct?

• A)Once written down,it may be written up for recoveries.
• B)It must be tested for impairment at least annually.
• C)A goodwill impairment loss must be reported as a separate line item within income from continuing operations unless it relates to discontinued operations.
• D)It must be reported as a separate line item in the balance sheet.

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Definitions:

Gross Method

An accounting approach where discounts for early payment are not considered until they are actually taken by the customer.

Merchandise

Goods that are purchased for resale to customers in the normal course of business operations.

Inventory Shrinkage

The loss of products between purchase from suppliers and sale to customers, often due to theft, damage, or clerical errors.

Operating Expense

Costs associated with the day-to-day operation of a business, including rent, utilities, and salaries.