Question

Businesses record goodwill ________. A) when they enjoy an outstanding reputation and loyalty with customers B) when they continue the business of an acquired corporation C) if their market value has increased significantly in the recent years D) if they acquire another company at an amount higher than the market value of its net assets

Answer 1

Answer:

Businesses record goodwill if they acquire another company at an amount higher than the market value of its net assets- option D.

Explanation:

Goodwill is only recorded in a situation whereby a business organization acquires other business organizations at an amount higher than the market value of its net assets.

Therefore, the answer to the question is option D - Businesses record goodwill  if they acquire another company at an amount higher than the market value of its net assets.

Answer 2

Answer:

D) If they acquire another company at an amount higher than the market value of its net assets.

Explanation:

Goodwill is basically the brand name, customer base or any patents. Hence the businesses record goodwill when they are acquiring any business or company which has a high price than its actual net assets, therefore, the extra price which is paid while acquiring is known as goodwill.

Hope this clear things up.

goodluck.