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WAEC Financial Accounting 1993 Question 15

Question 15

Final Accounts of a Sole Trader

Goodwill is

  1. A.a current asset
  2. B.a current liability
  3. C.a long term liability
  4. D.a fictitious asset
  5. E.an intangible asset.
Show the answer and explanation

Answer: E (an intangible asset.)

Explanation

Goodwill has value but no physical form: an intangible fixed asset.