Goodwill Is an Intangible Asset

question 29

Multiple Choice

Goodwill is an intangible asset

• A) That has a definite life and its cost should be amortized over its useful life.
• B) That is recorded when the company has projected earnings in excess of earnings expected for an investment in a similar company in the same industry.
• C) That is reviewed for impairment when circumstances indicate that impairment may have occurred.
• D) That is reviewed annually to determine whether impairment has occurred.

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Definitions:

Negotiability

The quality of a financial instrument that allows it to be transferred from one party to another with minimal legal restrictions.

Sum Certain

A specified, fixed amount of money that is agreed upon in a financial or legal document, leaving no ambiguity regarding the amount.

Requirements

Specific criteria or conditions that must be met in order to fulfill an agreement or complete a project.

Bearer Instrument

A bearer instrument is a type of document that allows the holder to claim the rights or assets it represents without endorsing or proving ownership.