Correct Answer:
D. The purchase consideration exceeds the fair value of identifiable net assets acquired
Goodwill is the excess of the cost of acquisition over the fair value of net identifiable assets.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
Goodwill arises in a business combination when:
Related MCQs
An unmodified (clean) audit opinion means that the financial statements:
A.
Are completely free of any error
B.
Prove that the entity is financially strong
C.
Give a true and fair view or present fairly, in all material respects
D.
Have been prepared by the auditor
Correct answer is:
C. Give a true and fair view or present fairly, in all material respects
Do you agree with this answer?
An expansionary fiscal policy involves:
A.
Reducing government spending and raising taxes
B.
Increasing government spending or cutting taxes
C.
Raising interest rates
D.
Selling government bonds only
Correct answer is:
B. Increasing government spending or cutting taxes
Do you agree with this answer?
The ability-to-pay principle of taxation says that:
A.
People should pay tax according to benefits received
B.
Everyone pays the same amount
C.
People with higher income or wealth should pay more tax
D.
Only businesses pay tax
Correct answer is:
C. People with higher income or wealth should pay more tax
Do you agree with this answer?
Regularity audit in the public sector comprises:
A.
Performance audit only
B.
Financial audit and compliance audit
C.
Tax audit only
D.
Environmental audit only
Correct answer is:
B. Financial audit and compliance audit
Do you agree with this answer?
Which of the following is an example of a substantive procedure?
A.
Sending confirmation requests to a sample of customers
B.
Observing segregation of duties in the purchasing department
C.
Inquiring about the approval process for payments
D.
Walking through the payroll system
Correct answer is:
A. Sending confirmation requests to a sample of customers
Do you agree with this answer?
The assertion 'rights and obligations' means that:
A.
All assets are physically present
B.
All sales are cash sales
C.
The entity holds or controls the rights to assets and liabilities are its obligations
D.
Management has the right to appoint the auditor
Correct answer is:
C. The entity holds or controls the rights to assets and liabilities are its obligations
Do you agree with this answer?
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