- 1 Marks
FA – May 2024 – L1 – SA – Q6 – Intangible Assets and Goodwill
Identifies the correct description of goodwill in financial statements.
Question
Which of the following about goodwill is true?
A. Goodwill is always recognised as an intangible asset in an entity’s financial statements.
B. Goodwill represents the total value of a business’s assets and liabilities.
C. The value of a business is solely based on the value of its net assets.
D. Goodwill reflects a business’s potential to generate future profits, making it an intangible asset.
E. Successful businesses do not have goodwill as it is not considered a valuable aspect during acquisitions.
Find Related Questions by Tags, levels, etc.
- Tags: Business Valuation, Goodwill, Intangible Assets
- Level: Level 1
- Topic: Intangible Assets and Goodwill
- Series: MAY 2024
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