The account for goodwill is located in the assets section of a company’s balance sheet. It is an intangible asset, as opposed to physical assets like buildings and equipment. Goodwill is an accounting construct that is required under Generally Accepted Accounting Principles (GAAP). The concept can be best illustrated with an example:
Trial Balance to Income Statement. It's not that difficult to put together a basic income statement. The number one thing to know when preparing an income statement is that it is drawn up from the figures in the trial balance. Let's return to the example we've been using throughout our lessons, George's Catering.