Which of the Following Properly Describes the Accounting for Goodwill

question 98

Multiple Choice

Which of the following properly describes the accounting for goodwill?

• A)Goodwill is recorded when it is internally generated.
• B)Goodwill is amortized over its useful life.
• C)Goodwill is the difference between the amount paid for a company relative to the book value of the acquired company's net assets.
• D)Goodwill is written down when it has been determined to be impaireD.Goodwill is not amortized.Instead, it is reviewed for impairment and is written down when it has been determined to be impaired.

---

Definitions:

Fundamental Attribution Error

The tendency to overemphasize personality traits and underestimate situational factors when explaining others' behaviors.

Actor-observer Bias

The tendency to attribute one's own actions to external factors while attributing others' actions to their internal characteristics.

Situational Influences

External factors present in an individual's environment that impact behavior, decisions, and perceptions.

Situational Factors

Refers to external influences that affect an individual's behavior, decision-making, and ability to perform in various situations.