Question

Goodwill is a fictitious asset.

Answer 1

False

Explanation:

Goodwill is the value of a firm's reputation, its good brand name and favourable contacts in the market. It cannot be seen or touched like other assets of the firm. It does not have any physical existence. It just has a capability to help the business in earning more and more profits. On the contrary, fictitious assets are neither tangible nor intangible assets. They are the expenses or losses which are still to be charged (debited) from the profit. They all have a debit balance and cannot be considered as assets of the firm.

Thus, goodwill is an intangible asset but not a fictitious asset.