GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
It becomes obsolete
|
|
|
It is an intangible asset
|
|
|
It does not become obsolete
|
|
|
It is not visible but it subject to fluctuations
|
Detailed explanation-1: -Explanation: Fictitious assets are expenses and losses which are not fully written off and to be shown in assets side of the balance sheet. Goodwill is not an expense, and it takes time to build. Hence, this statement is not correct.
Detailed explanation-2: -The true statement is option (a) Goodwill is an unidentifiable intangible asset.
Detailed explanation-3: -Outstanding expenses are current asset this statement is incorrect. Goodwill is intangible asset. This statement is correct as goodwill is intangible asset which is purchased by one company from another.
Detailed explanation-4: -Limitations of Goodwill Goodwill is difficult to price, and negative goodwill can occur when an acquirer purchases a company for less than its fair market value. This usually occurs when the target company cannot or will not negotiate a fair price for its acquisition.