Under GAAP, goodwill is:

A Amortized over 40 years

B Not amortized but tested annually for impairment

C Expensed immediately

D Never written down

✓ Correct Answer: Option B

ASC 350: goodwill is not amortized. Instead, it must be tested for impairment at least annually.

💡 Why is B) the correct answer?

The correct answer to the question "Under GAAP, goodwill is:" is Option B: Not amortized but tested annually for impairment.

The other options — A) Amortized over 40 years, C) Expensed immediately, D) Never written down — are incorrect for this CPA Exam Prep question. As explained above: ASC 350: goodwill is not amortized. Instead, it must be tested for impairment at least annually.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Financial Accounting (FAR) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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Under GAAP, goodwill is:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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