Quizes

Week 1

 1. | Question : | The view that consolidated financial statements represent those of a single economic entity with several classes of stockholder interest is consistent with the |

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  | Student Answer: | | a. parent company concept. |

  | | | b. current practice concept. |

  | | | c. historical cost company concept. |

  | | | d. economic unit concept. |

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  | Points Received: | 2 of 2 |

  | Comments: | |

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 2. | Question : | The parent company concept adjusts subsidiary net asset values for the |

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  | Student Answer: | | a. differences between cost and fair value. |

  | | | b. differences between cost and book value. |

  | | | c. total fair value implied by the price paid by the parent. |

  | | | d. total cost implied by the price paid by the parent. |

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  | Points Received: | 2 of 2 |

  | Comments: | |

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 3. | Question : | Which of the following statements would not be a valid or logical reason for entering into a business combination? |

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  | Student Answer: | | a. to increase market share. |

  | | | b. to avoid becoming a takeover target. |

  | | | c. to reduce risk by acquiring established product lines. |

  | | | d. the operating costs of the combined entity would be more than the sum of the separate entities. |

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  | Points Received: | 2 of 2 |

  | Comments: | |

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 4. | Question : | A potential offering price for a company is computed by adding the estimated goodwill to the |

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  | Student Answer: | | a. book value of the company™s net assets. |

  | | | b. book value of the company™s net identifiable assets. |

  | | | c. fair value of the company™s net assets. |

  | | | d. fair value of the company™s net identifiable assets. |

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  | Points Received: | 2 of 2 |

  | Comments: | |

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 5. | Question : | The view that only the parent company's share of the...