Test Bank for Advanced Accounting 13th Edition by Beams

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Test Bank for Advanced Accounting 13th Edition by b y Beams Complete downloadable file at: https://testbanku.eu/Test-Bank-for-Advanced-Accounting-1th-!dition-b"-Beams 1.1 Multiple Choice Questions 1) Which of the following is NOT a reason for a company to expand through a combination, rather than  by building new facilities? A) A combination might proide cost adantages! ") A combination might proide fewer operating delays! #) A combination might proide easier access to intangible assets! $) A combination might proide an opportunity to inest in a company without haing to ta%e responsibility for its &nancial results! Answer' $ Ob(ectie' O1!1 *nderstand the economic motiations motiations underlying business combinations! $i+culty' asy AA#-"' Analytical thin%ing

.) A business merger di/ers from a business consolidation because A) a merger dissoles all but one of the prior entities, but a consolidation dissoles all of the prior entities and forms a new corporation! ") a consolidation dissoles all but one of the prior entities, but a merger dissoles all of the prior entities! #) a merger is created when two entities (oin, but a consolidation is created when more than two entities  (oin! $) a consolidation is created when two entities (oin, but a merger is created when more than two entities  (oin! Answer' A Ob(ectie' O1!. earn about alternatie forms of business combinations, from both the legal and accounting perspecties! $i+culty' asy AA#-"' Analytical thin%ing

0) ollowing the accounting concept of a business combination, a business combination occurs when a company ac2uires an e2uity interest in another entity and has A) at least .34 ownership in the entity! ") more than 534 ownership in the entity! #) 1334 ownership in the entity! $) control oer the entity, irrespectie irrespectie of the percentage owned! Answer' $ Ob(ectie' O1!. earn about alternatie forms of business combinations, from both the legal and accounting perspecties! $i+culty' asy AA#-"' Analytical thin%ing

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6) 7istorically, much of the controersy concerning accounting re2uirements for business combinations inoled the 88888888 method! A) purchase ") pooling of interests #) e2uity $) ac2uisition Answer' " Ob(ectie' O1!. earn about alternatie forms of business combinations, from both the legal and accounting perspecties! $i+culty' asy AA#-"' Analytical thin%ing

5) 9itch #o! paid :53,333 in fees to its accountants and lawyers in ac2uiring -lope #ompany! 9itch will treat the :53,333 as A) an expense for the current year! ") a prior period ad(ustment to retained earnings! #) additional cost to inestment of -lope on the consolidated balance sheet! $) a reduction in additional paid;in capital! Answer' A Ob(ectie' O1!0 oderate AA#-"' Analytical thin%ing

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C) oderate AA#-"' Analytical thin%ing

16) Which of the following methods does the A-" A-" consider the best indicator of fair alues in the ealuation of goodwill impairment? A) -enior executieBs estimates ") inancial analyst forecasts #) air alue $) The present alue of future cash Hows discounted at the &rmBs cost of capital Answer' # Ob(ectie' O1!6 -ee how &rms record fair alues of assets and liabilities in an ac2uisition! $i+culty' asy AA#-"' Analytical thin%ing

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15) 9epper #ompany paid :.,533,333 for the net assets of -alt #orporation and -alt was then dissoled! -alt had no liabilities! The fair alues of -altBs assets were :0,53,333! -altBs only non;current assets were land and buildings with boo% alues of :133,333 and :5.3,333, respectiely, and fair alues of :1C3,333 and :03,333, respectiely! At At what alue will the buildings be recorded r ecorded by 9epper? A) :03,333 ") :5.3,333 #) :.13,333 $) :3 Answer' A Ob(ectie' O1!6 -ee how &rms record fair alues of assets and liabilities in an ac2uisition! $i+culty' >oderate AA#-"' Application of %nowledge

1) According to A-# C13;13, liabilities assumed in an ac2uisition will be alued at the 88888888! A) fair alue ") historical boo% alue #) current replacement cost $) present alue using mar%et interest rates Answer' A Ob(ectie' O1!0