Test bank For Advanced Accounting
Chapter 3 + 4 Final 15th Edition by Joe
Ben Hoyle
Under the acquisition method, indirect costs relating to acquisitions should be:
included in the investment cost.
deducted from other contributed capital.
expensed as incurred.
none of these. - ANSexpensed as incurred
Eliminating entries are made to cancel the effects of intercompany transactions and are made
on the:
workpaper only.
books of the parent company.
books of both the parent company and the subsidiary.
books of the subsidiary company. - ANSworkpaper only.
In a business combination accounted for as an acquisition, registration costs related to common
stock issued by the parent company are:
deducted from the investment cost.
expensed as incurred.
deducted from other contributed capital.
included in the investment cost. - ANSdeducted from other contributed capital.
On the consolidated balance sheet, consolidated stockholders' equity is:
less than the parent's stockholders' equity.
, equal to the sum of the parent and subsidiary stockholders' equity.
equal to the parent's stockholders' equity.
greater than the parent's stockholders' equity. - ANSequal to the parent's stockholders' equity
Majority-owned subsidiaries should be excluded from the consolidated statements when:
any of these circumstances exist.
control does not rest with the majority owner.
the subsidiary operates under governmentally imposed uncertainty.
a foreign subsidiary is domiciled in a country with foreign exchange restrictions or controls -
ANSany of these circumstances exist.
Under the economic entity concept, consolidated financial statements are intended primarily for
the benefit of the:
minority stockholders.
creditors of the parent company.
all of these.
stockholders of the parent company. - ANSall of these.
Reasons a parent company may pay more than book value for the subsidiary company's stock
include all of the following EXCEPT:
stockholders' equity may be undervalued.
liabilities may be overvalued.
the existence of unrecorded goodwill.
the fair value of one of the subsidiary's assets may exceed its recorded value because of
appreciation. - ANSstockholders' equity may be undervalued.
What is the method of presentation required by SFAS 160 of "non-controlling interest" on a
consolidated balance sheet?
Chapter 3 + 4 Final 15th Edition by Joe
Ben Hoyle
Under the acquisition method, indirect costs relating to acquisitions should be:
included in the investment cost.
deducted from other contributed capital.
expensed as incurred.
none of these. - ANSexpensed as incurred
Eliminating entries are made to cancel the effects of intercompany transactions and are made
on the:
workpaper only.
books of the parent company.
books of both the parent company and the subsidiary.
books of the subsidiary company. - ANSworkpaper only.
In a business combination accounted for as an acquisition, registration costs related to common
stock issued by the parent company are:
deducted from the investment cost.
expensed as incurred.
deducted from other contributed capital.
included in the investment cost. - ANSdeducted from other contributed capital.
On the consolidated balance sheet, consolidated stockholders' equity is:
less than the parent's stockholders' equity.
, equal to the sum of the parent and subsidiary stockholders' equity.
equal to the parent's stockholders' equity.
greater than the parent's stockholders' equity. - ANSequal to the parent's stockholders' equity
Majority-owned subsidiaries should be excluded from the consolidated statements when:
any of these circumstances exist.
control does not rest with the majority owner.
the subsidiary operates under governmentally imposed uncertainty.
a foreign subsidiary is domiciled in a country with foreign exchange restrictions or controls -
ANSany of these circumstances exist.
Under the economic entity concept, consolidated financial statements are intended primarily for
the benefit of the:
minority stockholders.
creditors of the parent company.
all of these.
stockholders of the parent company. - ANSall of these.
Reasons a parent company may pay more than book value for the subsidiary company's stock
include all of the following EXCEPT:
stockholders' equity may be undervalued.
liabilities may be overvalued.
the existence of unrecorded goodwill.
the fair value of one of the subsidiary's assets may exceed its recorded value because of
appreciation. - ANSstockholders' equity may be undervalued.
What is the method of presentation required by SFAS 160 of "non-controlling interest" on a
consolidated balance sheet?
