Goodwill can be recorded
A)when customers keep returning because they are satisfied with the company's products.
B)when the company acquires a good location for its business.
C)when the company has exceptional management.
D)only when there is a purchase of an entire business.

Question

Quizplus · Accepted Answer

Goodwill is an intangible asset that is recognized in accounting only when a company acquires another business entirely. It represents the excess of the purchase price over the fair value of the identifiable net assets of the acquired company. Goodwill cannot be recognized due to factors like customer satisfaction, good location, or exceptional management unless these factors are part of a business acquisition.

Goodwill Can Be Recorded