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A-LevelAccountingAccounting for non-current assets9706/12 · May/June 2011 · Q71 Mark

How should goodwill be treated by a limited company?

AGoodwill should always be written off immediately.
BNon-purchased goodwill is shown in the balance sheet.
CPurchased goodwill is shown in the balance sheet and written off over its useful life.
DPurchased goodwill remains on the balance sheet as a permanent item.

✓ Correct answer

C: Purchased goodwill is shown in the balance sheet and written off over its useful life.

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About this question

Topic
Accounting for non-current assets, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source
A-Level Accounting, May/June 2011 Paper 1 Variant 2, question 7.

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