Advanced Accounting, 7th Edition Debra
Advanced Accounting
( Test Bank)
Advanced Accounting, 7th Edition Debra C. Jeter, Paul K. Chaney Test bank
Edition: 12thEdition
Author Name:Debra C. Jeter, Paul K. Chaney
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Advanced Accounting, 7th Edition Debra C. Jeter, Paul K. Chaney Test bank
Package Title: Test Bank Questions
Course Title: Advanced Accounting, 7e
Chapter Number: 1
Question Type: Multiple Choice
1) A(n) ______ occurs when the operations of two or more companies are brought under common control.
- a) tender offer
- b) vertical combination
- c) operating synergy
- d) business combination
Answer: d
Question Title: Test Bank (Multiple Choice) Question 01
Difficulty: Easy
Learning Objective: 1 Describe historical trends in types of business combinations.
Section Reference: 1.1
2) Which of the following situations best describes a business combination to be accounted for as a statutory merger?
- a) Both companies in a combination continue to operate as separate, but related, legal entities.
- b) Only one of the combining companies survives and the other loses its separate identity.
- c) Two companies combine to form a new third company, and the original two companies are dissolved.
- d) One company transfers assets to another company it has created.
Answer: b
Question Title: Test Bank (Multiple Choice) Question 02
Difficulty: Easy
Learning Objective: 5 Distinguish between an asset and a stock acquisition.
Section Reference: 1.5
3) A firm can use which method of financing for an acquisition structured as either an asset or stock acquisition?
- a) Cash
- b) Issuing Debt
- c) Issuing Stock
- d) All of these
Answer: d
Question Title: Test Bank (Multiple Choice) Question 03
Difficulty: Easy
Learning Objective: 6 Indicate the factors used to determine the price and the method of payment for a business combination.
Section Reference: 1.5
4) The objectives of FASB 141R (Business Combinations) and FASB 160 (Noncontrolling Interests in Consolidated Financial Statements) are as follows:
- a) to improve the relevance, comparability, and transparency of financial information related to business combinations.
- b) to eliminate the amortization of Goodwill.
- c) to facilitate the convergence project of the FASB and the International Accounting Standards Board.
- d) to improve the relevance, comparability, and transparency of financial information related to business combinations and to eliminate the amortization of Goodwill.
Answer: d
Question Title: Test Bank (Multiple Choice) Question 04
Difficulty: Medium
Learning Objective: 9 Discuss the Statements of Financial Accounting Concepts (SFAC).
Section Reference: 1.1
5) A business combination in which the boards of directors of the potential combining companies negotiate mutually agreeable terms is a(n):
- a) agreeable combination.
- b) friendly combination.
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