a. What is goodwill?
b. List four items of recurrent expenditure for a local government
c. Explain the three types of inventory in manufacturing account
Explanation
a. Goodwill is an intangible asset that is associated with the purchase of one company by another. In other words goodwill is the portion of the purchase price that is higher than the sum of net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process.
b. - goods and services
- wages and salaries
- interest payments
- subsidies and transfers
c. - Raw materials: These are basic components that are used by the manufacturer to process or convert them into finished goods or subassmeblies
- Work-in-progress: This is an inventory type which describe as partially finished goods or raw matarials awaiting competition.
- Finishe goods: This is a form of inventory on which complete manufacturing processing costs are incured and the product is ready to be sold/distributed.