Which of the Following Defines Goodwill Resulting from an Acquisition

question 33

Multiple Choice

Which of the following defines goodwill resulting from an acquisition?

• A)The historical value of the stock received less the current value of the stock issued.
• B)The excess purchase price over the fair value of the entity acquired.
• C)The difference between the designated market value and the book value of the target company.
• D)The amount of the contingent performance obligation less the purchase price adjustment made upon signing the letter of intent.

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Definitions:

Transmittal

The process or document involved in sending something from one person or place to another.

FICA-OASDI

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance, a U.S. payroll tax funding Social Security.

FUTA

Stands for Federal Unemployment Tax Act, which imposes a payroll tax on employers to help fund state workforce agencies.

SUTA

State Unemployment Tax Act; a type of payroll tax that employers must pay to the state government to fund unemployment benefits.