The meaning of goodwill in accounting is:Multiple Choice The amount by which a company's value exceeds the value of its individual assets and liabilities. Long term assets held as investment. The support of the board of directors for the operating decisions of management. The cost of developing, maintaining, or enhancing the value of a trademark. Rights granted to an entity to deliver a product or service under specified conditions.

The correct answer is: (A) The amount by which a company's value exceeds the value of its individual assets and liabilities. Goodwill is an intangible asset that is recorded when a company is purchased for a value greater than the sum of its individual assets and liabilities. This excess amount is known as goodwill.Goodwill is an intangible asset that is created when one company purchases another for a premium value. It is calculated as the difference between the purchase price and the combined fair market value of the assets and liabilities of the acquired company. Goodwill is an asset that provides value to the acquiring company because it includes the reputation, customer base, and any other intangible assets of the acquired company.

Answered: The meaning of goodwill in accounting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The meaning of goodwill in accounting is:

Multiple Choice

The amount by which a company's value exceeds the value of its individual assets and liabilities.
Long term assets held as investment.
The support of the board of directors for the operating decisions of management.
The cost of developing, maintaining, or enhancing the value of a trademark.
Rights granted to an entity to deliver a product or service under specified conditions.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions