Question

In accounting, goodwill

A. Is never recorded.
B. May be recorded when a company's level of net income exceeds the industry average.
C. Must be expensed in the period when it is acquired.
D. May be recorded when the company purchases another business.

Answer 1

Answer:

D. May be recorded when the company purchases another business.

Explanation:

Goodwill is the amount in excess of the purchase price of a company acquired less all the liabilities and assets of the company purchased.

It is recorded on the balance sheet as an intangible asset.