S1: Goodwill is an intangible asset. S2: Goodwill can be self-generated and recorded in the books of accounts. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Goodwill is an intangible asset. S2: Goodwill can be self-generated and recorded in the books of accounts. Which statement(s) is/are correct?
A. S2 only
B. S1 only
C. Both S1 and S2
D. Neither S1 nor S2
Answer: Option B
Solution (By JKSSB Mock Tests)
Goodwill is an intangible asset representing the firm's reputation. However, AS 26 prohibits the recognition of self-generated goodwill in the balance sheet; only purchased goodwill can be recorded. S1 is correct, S2 is incorrect.
Explanation:
The matching concept ensures that all expenses incurred to earn a specific revenue are recognized in the same accounting period to find the true profit.
No comments yet. Be the first to start the discussion!