Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Goodwill falls under which category of assets:

Options:

Current Assets

Tangible Assets

Fictitious Assets

None of the above

Correct Answer:

None of the above

Explanation:

Goodwill is an intangible asset, but also a capital asset. The value of goodwill refers to the amount over book value that one company pays when acquiring another. Goodwill is classified as a capital asset because it provides an ongoing revenue generation benefit for a period that extends beyond one year.