江西财经大学高级财务会计国际学院题库chapter .pdfVIP

AdvancedAccounting,11e(Beams/Anthony/Bettinghaus/Smith)

Chapter1BusinessCombinations

MultipleChoiceQuestions

1)Whichofthefollowingisnotareasonforacompanytoexpandthroughacombination,

ratherthanbybuildingnewfacilities?

A)Acombinationmightprovidecostadvantages.

B)Acombinationmightprovidefeweroperatingdelays.

C)Acombinationmightprovideeasieraccesstointangibleassets.

responsibilityforitsfinancialresults.

Answer:D

Objective:LO1

Difficulty:Easy

2)Abusinessmergerdiffersfromabusinessconsolidationbecause

priorentities.

priorentities.

twoentitiesjoin.

twoentitiesjoin.

Answer:A

Objective:LO2

Difficulty:Easy

whenacompanyacquiresanequityinterestinanotherentityandhas

A)atleast20%ownershipintheentity.

B)morethan50%ownershipintheentity.

C)100%ownershipintheentity.

D)controlovertheentity,irrespectiveofthepercentageowned.

Answer:D

Objective:LO2

Difficulty:Easy

4)Historically,muchofthecontroversyconcerningaccountingrequirementsforbusiness

combinationsinvolvedthe________method.

A)purchase

B)poolingofinterests

C)equity

D)acquisition

Answer:B

Objective:LO2

Difficulty:Easy

Pitchwilltreatthe$50,000as

A)anexpenseforthecurrentyear.

B)apriorperiodadjustmenttoretainedearnings.

C)additionalcosttoinvestmentofSlopeontheconsolidatedbalancesheet.

D)areductioninadditionalpaid-incapital.

Answer:A

Objective:LO3,4

Difficulty:Moderate

sharesofSeuratCompanyinanall-stocktransaction.Picassopaidtheinvestmentbankers

$35,000andwilltreattheinvestmentbankerfeeas

A)anexpenseforthecurrentyear.

B)apriorperiodadjustmenttoRetainedEarnings.

C)additionalgoodwillontheconsolidatedbalancesheet.

D)areductiontoadditionalpaid-incapital.

Answer:D

Objective:LO3

Difficulty:Moderate

7)DurerInc.acquiredSeaCorporat