What is called the excess of purchase price over fair market value of net assets that are acquired under the purchase method of accounting ?
Correct answer: C. Goodwill
- A. Bonus
- B. Up level
- C. Goodwill
- D. Upgradation
Explanation
Goodwill is the excess of the purchase price over the fair market value of the identifiable net assets acquired. It represents benefits such as reputation, customer loyalty and established business relationships.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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