A company should immediately recognize: A) any gain when it constructs a piece of equipment at a cost savings.              B) any gain when it makes a bargain purchase.                                                 C) any gain when a company receives no cash for an asset received in an exchange.                                                                                                           D) any loss when it ignorantly pays too much for an asset originally.

If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it does not represent a real financial cost to your firm as long as the customer periodically pays off its entire balance. O True O False

• Which of the following is incorrect? O Straight line amortization of goodwill is simpler than goodwill impairment testing. Straight line amortization is considered by many to provide little if any useful information to readers of financial statements. Straight line amortization can only be used under U.S. GAAP when impairment testing is impossible. Goodwill impairment testing provides companies with more opportunities to engage in earnings management than does straight line amortization.

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