Multiple Choice
Which type of contract usually does not mention a purchase price?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is NOT an example of a tangible asset?
A
Land
B
Goodwill
C
Inventory
D
Equipment
Verified step by step guidance1
Understand the concept of tangible assets: Tangible assets are physical items that have a measurable value and can be touched or seen. Examples include land, inventory, and equipment.
Contrast tangible assets with intangible assets: Intangible assets are non-physical and include items like goodwill, trademarks, and patents. These assets represent value but do not have a physical form.
Review the options provided: Land, inventory, and equipment are all physical items that can be touched and seen, making them tangible assets.
Identify goodwill: Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net assets. It represents factors like brand reputation and customer loyalty.
Conclude that goodwill is NOT a tangible asset, as it does not have a physical form, unlike the other options provided.
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