When a business is purchased from a sole trader, the excess of the purchase price over the net assets is
-
A.
reserve -
B.
goodwill -
C.
feehold -
D.
valuation price
Correct Answer: Option B
Explanation
Goodwill is recorded when a company acquires (purchases) another company and the purchase price is greater than the fair value of the identifiable tangible and intangible assets therein.