In Accounting,goodwill

question 51

Multiple Choice

In accounting,goodwill

• A)May be recorded whenever a company achieves a level of net income that exceeds the industry average.
• B)Is amortized over its useful life.
• C)May be recorded when a company purchases another business.
• D)Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify.

---

Definitions:

Units-Of-Activity

A depreciation method where the useful life of an asset is based on the number of units it produces or the hours it operates, rather than time.

Salvage Value

Predicted value upon resale of an asset at the end of its practical life.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Useful Life

The estimated time period that an asset is expected to be usable for the purposes of a business before it becomes obsolete.