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 an exchange transaction involving the purchase of an entire business.

Question

Quizplus · Accepted Answer

Goodwill can only be recorded when there is an exchange transaction involving the purchase of an entire business. It is the excess cost of purchasing a business over the fair value of its identifiable assets and liabilities. Goodwill represents the intangible value of a company, such as its reputation, brand recognition, customer loyalty, and skilled workforce.

Goodwill Can Be Recorded