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TEST
BANK
Advanced
Accountin
g
Part 2
ZEUS VERNON B. MILLAN
2026-01-09 Start your exams prepared! Page 1
,? Updated:
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your|| exams
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ALL RIGHTS RESERVED
2015
No part of this work covered by
the copyright hereon may be
reproduced or used in any form
or by any means - electronic or
mechanical, including
photocopying – without the
written permission of the
author.
ISBN 978-621-95096-5-7
Published by:
BANDOLIN ENTERPRISE
No. 100 Montebello Village, Bakakeng Sur, Baguio City 2600,
Philippines
2
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prepared!
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TABLE OF CONTENTS
CHAPTER 13
BUSINESS COMBINATIONS (PART 1).............1
OVERVIEW ON THE TOPIC...........................................1
INTRODUCTION........................................................1
OBJECTIVE..............................................................4
SCOPE...................................................................5
DEFINITION OF BUSINESS COMBINATION........................5
Essential elements in the definition of a business combination 5
ACCOUNTING FOR BUSINESS COMBINATION....................7
IDENTIFYING THE ACQUIRER........................................8
DETERMINING THE ACQUISITION DATE.........................10
RECOGNIZING AND MEASURING GOODWILL..................11
Consideration transferred...............................12
Non-controlling interest..................................12
Previously held equity interest in the acquiree13
Net identifiable assets acquired.....................13
RESTRUCTURING PROVISIONS....................................22
SPECIFIC RECOGNITION PRINCIPLES............................23
1. Operating leases.......................................23
2. Intangible assets.......................................26
EXCEPTION TO THE RECOGNITION PRINCIPLE – CONTINGENT LIABILITIES 32
EXCEPTIONS TO BOTH THE RECOGNITION AND MEASUREMENT PRINCIPLES 34
Additional concepts on Consideration transferred 37
EXCEPTIONS TO THE MEASUREMENT PRINCIPLE.............40
CHAPTER 13: SUMMARY..........................................43
CHAPTER 13: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)............................................................44
CHAPTER 13: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).........................................48
CHAPTER 13: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES) 55
CHAPTER 14
BUSINESS COMBINATIONS (PART 2)............63
SHARE-FOR-SHARE EXCHANGES.................................63
BUSINESS COMBINATION ACHIEVED IN STAGES..............67
BUSINESS COMBINATION ACHIEVED WITHOUT TRANSFER OF CONSIDERATION 70
MEASUREMENT PERIOD............................................73
DETERMINING WHAT IS PART OF THE BUSINESS COMBINATION TRANSACTION 79
Reacquired rights...........................................82
Settlement of pre-existing relationships between the acquirer
and acquiree...................................................82
SUBSEQUENT MEASUREMENT AND ACCOUNTING...........89
DISCLOSURES........................................................96
CHAPTER 14: SUMMARY..........................................96
CHAPTER 14: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)............................................................97
CHAPTER 14: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).........................................99
CHAPTER 14: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES)
........................................................................108
CHAPTER 15
BUSINESS COMBINATIONS (PART 3)..........115
3
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SPECIAL ACCOUNTING TOPICS FOR BUSINESS COMBINATION115
GOODWILL..........................................................115
Due diligence................................................116
Methods of estimating goodwill....................117
REVERSE ACQUISITIONS.........................................122
COMBINATION OF MUTUAL ENTITIES.........................126
CHAPTER 15: SUMMARY........................................127
CHAPTER 15: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)..........................................................127
CHAPTER 15: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).......................................128
CHAPTER 15: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES)
........................................................................132
CHAPTER 15: THEORY OF ACCOUNTS REVIEWER........134
CHAPTER 15 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS
........................................................................141
CHAPTER 16
CONSOLIDATED FINANCIAL STATEMENTS (PART 1) 142
OVERVIEW ON THE TOPIC.......................................142
SCOPE...............................................................143
CONTROL...........................................................143
POWER..............................................................144
Administrative rights....................................145
Unilateral rights............................................145
Protective rights...........................................145
Substantive rights........................................146
Voting rights.................................................147
Substantive removal and other rights held by other parties
.....................................................................151
EXPOSURE OR RIGHTS TO VARIABLE RETURNS............151
ABILITY TO USE ITS POWER TO AFFECT INVESTOR’S RETURNS 151
ACCOUNTING REQUIREMENTS..................................152
Uniform accounting policies.........................152
Reporting date..............................................152
Consolidation period.....................................153
Measurement................................................153
NON-CONTROLLING INTERESTS (NCI).......................154
PREPARING THE CONSOLIDATED FINANCIAL STATEMENTS154
CONSOLIDATION AT DATE OF ACQUISITION.................155
CONSOLIDATION SUBSEQUENT TO DATE OF ACQUISITION162
Step 1: Analysis of effects of intercompany transaction 162
Step 2: Analysis of net assets.......................162
Step 3: Goodwill computation......................163
Step 4: Non-controlling interest in net assets164
Step 5: Consolidated retained earnings.......164
Step 6: Consolidated profit or loss................164
Step 7: Profit or loss attributable to owners of parent and NCI
.....................................................................165
SUBSIDIARY’S OUTSTANDING CUMULATIVE PREFERENCE SHARES 180
CHAPTER 16: SUMMARY........................................181
CHAPTER 16: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)..........................................................184
CHAPTER 16: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).......................................185
4
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1 of 433 Q&A || Complete Questions& Correct Answers || (100% Verified) ||| Latest Update||Guaranteed Pass A+| Fully
1 Start
Verified
your|| exams
? //full exam
prepared!
coverage!
TEST
BANK
Advanced
Accountin
g
Part 2
ZEUS VERNON B. MILLAN
2026-01-09 Start your exams prepared! Page 1
,? Updated:
Page 2026/2027//
2 of 433 Q&A || Complete Questions& Correct Answers || (100% Verified) ||| Latest Update||Guaranteed Pass A+| Fully
2 Start
Verified
your|| exams
? //full exam
prepared!
coverage!
ALL RIGHTS RESERVED
2015
No part of this work covered by
the copyright hereon may be
reproduced or used in any form
or by any means - electronic or
mechanical, including
photocopying – without the
written permission of the
author.
ISBN 978-621-95096-5-7
Published by:
BANDOLIN ENTERPRISE
No. 100 Montebello Village, Bakakeng Sur, Baguio City 2600,
Philippines
2
2026-01-09 Start your exams prepared! Page 2
,? Updated:
Page 2026/2027//
3 of 433 Q&A || Complete Questions& Correct Answers || (100% Verified) ||| Latest Update||Guaranteed Pass A+| Fully
3 Start
Verified
your|| exams
? //full exam
prepared!
coverage!
TABLE OF CONTENTS
CHAPTER 13
BUSINESS COMBINATIONS (PART 1).............1
OVERVIEW ON THE TOPIC...........................................1
INTRODUCTION........................................................1
OBJECTIVE..............................................................4
SCOPE...................................................................5
DEFINITION OF BUSINESS COMBINATION........................5
Essential elements in the definition of a business combination 5
ACCOUNTING FOR BUSINESS COMBINATION....................7
IDENTIFYING THE ACQUIRER........................................8
DETERMINING THE ACQUISITION DATE.........................10
RECOGNIZING AND MEASURING GOODWILL..................11
Consideration transferred...............................12
Non-controlling interest..................................12
Previously held equity interest in the acquiree13
Net identifiable assets acquired.....................13
RESTRUCTURING PROVISIONS....................................22
SPECIFIC RECOGNITION PRINCIPLES............................23
1. Operating leases.......................................23
2. Intangible assets.......................................26
EXCEPTION TO THE RECOGNITION PRINCIPLE – CONTINGENT LIABILITIES 32
EXCEPTIONS TO BOTH THE RECOGNITION AND MEASUREMENT PRINCIPLES 34
Additional concepts on Consideration transferred 37
EXCEPTIONS TO THE MEASUREMENT PRINCIPLE.............40
CHAPTER 13: SUMMARY..........................................43
CHAPTER 13: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)............................................................44
CHAPTER 13: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).........................................48
CHAPTER 13: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES) 55
CHAPTER 14
BUSINESS COMBINATIONS (PART 2)............63
SHARE-FOR-SHARE EXCHANGES.................................63
BUSINESS COMBINATION ACHIEVED IN STAGES..............67
BUSINESS COMBINATION ACHIEVED WITHOUT TRANSFER OF CONSIDERATION 70
MEASUREMENT PERIOD............................................73
DETERMINING WHAT IS PART OF THE BUSINESS COMBINATION TRANSACTION 79
Reacquired rights...........................................82
Settlement of pre-existing relationships between the acquirer
and acquiree...................................................82
SUBSEQUENT MEASUREMENT AND ACCOUNTING...........89
DISCLOSURES........................................................96
CHAPTER 14: SUMMARY..........................................96
CHAPTER 14: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)............................................................97
CHAPTER 14: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).........................................99
CHAPTER 14: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES)
........................................................................108
CHAPTER 15
BUSINESS COMBINATIONS (PART 3)..........115
3
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4 of 433 Q&A || Complete Questions& Correct Answers || (100% Verified) ||| Latest Update||Guaranteed Pass A+| Fully
4 Start
Verified
your|| exams
? //full exam
prepared!
coverage!
SPECIAL ACCOUNTING TOPICS FOR BUSINESS COMBINATION115
GOODWILL..........................................................115
Due diligence................................................116
Methods of estimating goodwill....................117
REVERSE ACQUISITIONS.........................................122
COMBINATION OF MUTUAL ENTITIES.........................126
CHAPTER 15: SUMMARY........................................127
CHAPTER 15: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)..........................................................127
CHAPTER 15: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).......................................128
CHAPTER 15: EXERCISES (FOR CLASSROOM INSTRUCTION PURPOSES)
........................................................................132
CHAPTER 15: THEORY OF ACCOUNTS REVIEWER........134
CHAPTER 15 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS
........................................................................141
CHAPTER 16
CONSOLIDATED FINANCIAL STATEMENTS (PART 1) 142
OVERVIEW ON THE TOPIC.......................................142
SCOPE...............................................................143
CONTROL...........................................................143
POWER..............................................................144
Administrative rights....................................145
Unilateral rights............................................145
Protective rights...........................................145
Substantive rights........................................146
Voting rights.................................................147
Substantive removal and other rights held by other parties
.....................................................................151
EXPOSURE OR RIGHTS TO VARIABLE RETURNS............151
ABILITY TO USE ITS POWER TO AFFECT INVESTOR’S RETURNS 151
ACCOUNTING REQUIREMENTS..................................152
Uniform accounting policies.........................152
Reporting date..............................................152
Consolidation period.....................................153
Measurement................................................153
NON-CONTROLLING INTERESTS (NCI).......................154
PREPARING THE CONSOLIDATED FINANCIAL STATEMENTS154
CONSOLIDATION AT DATE OF ACQUISITION.................155
CONSOLIDATION SUBSEQUENT TO DATE OF ACQUISITION162
Step 1: Analysis of effects of intercompany transaction 162
Step 2: Analysis of net assets.......................162
Step 3: Goodwill computation......................163
Step 4: Non-controlling interest in net assets164
Step 5: Consolidated retained earnings.......164
Step 6: Consolidated profit or loss................164
Step 7: Profit or loss attributable to owners of parent and NCI
.....................................................................165
SUBSIDIARY’S OUTSTANDING CUMULATIVE PREFERENCE SHARES 180
CHAPTER 16: SUMMARY........................................181
CHAPTER 16: MULTIPLE CHOICE – THEORY (FOR CLASSROOM INSTRUCTION
PURPOSES)..........................................................184
CHAPTER 16: MULTIPLE CHOICE – COMPUTATIONAL (FOR CLASSROOM
INSTRUCTION PURPOSES).......................................185
4
2026-01-09 Start your exams prepared! Page 4
