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ACC 401 WEEK 02 QUIZ
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ACC 401 Week 2 Quiz,
ACC 401 Week 2 Quiz
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ACC 401 Week 2 Quiz – Strayer
Chapter 1
Introduction to Business Combinations and the Conceptual Framework
Multiple Choice
Stock given as consideration for a business combination is valued at
fair market value
par value
historical cost
None of the above
Which of the following situations best describes a business combination to be accounted for as a statutory merger?
Both companies in a combination continue to operate as separate, but related, legal entities.
Only one of the combining companies survives and the other loses its separate identity.
Two companies combine to form a new third company, and the original two companies are dissolved.
One company transfers assets to another company it has created.
A firm can use which method of financing for an acquisition structured as either an asset or stock acquisition?
Cash
Issuing Debt
Issuing Stock
All of the above
The objectives of FASB 141R (Business Combinations) and FASB 160 (NonControlling Interests in Consolidated Financial Statements) are as follows:
to improve the relevance, comparibility, and transparency of financial information related to business combinations.
to eliminate the amortization of Goodwill.
to facilitate the convergence project of the FASB and the International Accounting Standards Board.
a and b only
A business combination in which the boards of directors of the potential combining companies negotiate mutually agreeable terms is a(n)
agreeable combination.
friendly combination.
hostile combination.
unfriendly combination.
A merger between a supplier and a customer is a(n)
friendly combination.
horizontal combination.
unfriendly combination.
vertical combination.
When a business...