Day: September 18, 2022

How should goodwill be treated in the accounts of a limited company?

Select ONE answer:

1. Goodwill should always be written off immediately.
2. Non-purchased goodwill is shown in the balance sheet.
3. Purchased goodwill remains on the balance sheet as a permanent item.
4. Purchased goodwill is shown in the balance sheet and written off over its useful life.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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