Final answer:
Goodwill should be recorded as an intangible asset on the balance sheet and is not amortized but instead tested annually for impairment. It cannot be expensed upon purchase, charged to owner's equity, or sold by itself, as it is a value inherently tied to the overall business entity.
Step-by-step explanation:
The question relates to goodwill accounting treatment. The answer to the question is option d, which states goodwill should be recorded as an intangible asset and carried on the balance sheet unless an impairment in value occurs. Goodwill is recognized in accounting when a company acquires another business for a price that is higher than the fair value of its net identifiable assets. This difference is considered to be goodwill, which is the value of the acquired company's brand, customer base, employee relations, and any patents or proprietary technology.
Goodwill is not amortized but is tested annually for impairment. If there's evidence that the goodwill has decreased in value, an impairment loss must be recorded. However, it cannot be expensed immediately upon purchase, directly charged to owner's equity, nor sold by itself as it is inseparably tied to the business as a whole.