Question 6 The reason goodwill is sometimes referred to as a master valuation ac
ID: 2511219 • Letter: Q
Question
Question 6
The reason goodwill is sometimes referred to as a master valuation account is because ___________.
Question 6 options:
it represents the purchase price of a business that is about to be sold
it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business
the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation
it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value
Question 7
Which of the following is often reported as an extraordinary item?
Question 7 options:
Amortization expense
Impairment losses for intangible assets
Research and development costs
None of the above
Question 8
When a patent is amortized, the credit is usually made to _________.
Question 8 options:
the Patent account
an Accumulated Amortization account
a Deferred Credit account
an Expense account
Question 9
Which of the following methods of amortization is normally used for intangible assets?
Question 9 options:
Sum-of-the-years'-digits
Straight-line
Units of production
Double-declining-balance
Question 10
Goodwill may be recorded when ____________.
Question 10 options:
it is identified within a company
one company acquires another in a business combination
the fair value of a company's assets exceeds their cost
a company has exceptional customer relations
A.it represents the purchase price of a business that is about to be sold
B.it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business
C.the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation
D.it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value
Explanation / Answer
Q6)option B
it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business
Q7)option D
none of the above
Q8)option A
patent account
Q9)option B
Straght lline
Q10)option B
one company acquires another in a business combination
Q6)option B
it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business
Q7)option D
none of the above
Q8)option A
patent account
Q9)option B
Straght lline
Q10)option B
one company acquires another in a business combination
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