Which of the Following Statements About Goodwill Is Correct

question 21

Multiple Choice

Which of the following statements about goodwill is correct?

• A) Goodwill is classified as a current asset.
• B) Goodwill can be purchased or sold as a separate item.
• C) Under IFRS 3/AASB 3 goodwill must be amortised.
• D) Goodwill arises from many factors, such as customer confidence, superior management and a favourable location.

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Definitions:

Bank Service Charge

Fees charged by a bank to a customer for account services provided.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Accounts Receivable

The amount customers are required to pay a business for goods or services already received but not yet settled.

NSF

An abbreviation for "Non-Sufficient Funds," indicating that a cheque cannot be honored because the account does not have enough money.