Test Bank for Advanced Financial Accounting
a a a a a a
a 13th Edition
a a
By Theodore Christensen
a a
, Table Of Contents:
1. Intercorporate Acquisitions and Investments in Other Entities
2. Reporting Intercorporate Investments and Consolidation of Wholly Owned
Subsidiaries with No Differential
3. The Reporting Entity and the Consolidation of Less-Than-Wholly-Owned
Subsidiaries with NoDifferential
4. Consolidation of Wholly Owned Subsidiaries Acquired at More Than Book Value
5. Consolidation of Less-Than-Wholly-Owned Subsidiaries Acquired at More Than
Book Value
6. Intercompany Inventory Transactions
7. Intercompany Transfers of Services and Noncurrent Assets
8. Intercompany Indebtedness
9. Consolidation Ownership Issues
10. Additional Consolidation Reporting Issues
11. Multinational Accounting: Foreign Currency Transactions and Financial
Instruments
12. Multinational Accounting: Issues in Financial Reporting and Translation of Foreign
Entity Statements
13. Segment and Interim Reporting
14. SEC Reporting
15. Partnerships: Formation, Operation, and Changes in Membership
16. Partnerships: Liquidation
17. Governmental Entities: Introduction and General Fund Accounting
18. Governmental Entities: Special Funds and Governmentwide Financial Statements
19. Not-for-Profit Entities
20. Corporations in Financial Difficulty
,TEST BANK FOR
a a
Advanced Financial Accounting 13th Edition By Theodore Christensen
a a a a a a a
Chapter a 1 Intercorporate a Acquisitions a and a Investments a in a Other a Entities
1) Assuming ano aimpairment a in avalue aprior ato atransfer, aassets atransferred aby aa aparent acompany ato
a another a entity a it a has a created a should a be a recorded a by athe a newly a created a entity aat a the a assets':
A) cost ato athe aparent acompany.
B) book avalue aon athe aparent a company's abooks aat athe adate aof atransfer.
C) fair avalue aat athe adate aof atransfer.
D) fair avalue aof aconsideration aexchanged abyathe anewly acreated aentity.
Answer: aB
a Difficulty: a1
aEasy
Topic: a Internal aExpansion: aCreating aa aBusiness aEntity; aValuation a of aBusiness aEntities
a Learning a Objective: 01-01 a Understand a and a explain a the a reasons a for a and a different a methods a of
a business aexpansion, athe atypes aof aorganizational astructures, aand athe atypes aof aacquisitions.; a01 a-
03 aMake acalculations aand aprepare ajournal aentries afor athe acreation a of aa abusiness aentity.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
2) Given athe aincreased adevelopment aof acomplex abusiness astructures, awhich aof athe afollowing
aregulators a is a responsible a for a the a continued a usefulness a of aaccounting a reports?
A) Securities a and a Exchange a Commission a (SEC)
B) Public a Company a Accounting a Oversight a Board a (PCAOB)
C) Financial a Accounting a Standards a Board a (FASB)
D) All aof athe aother aanswers aare acorrect
Answer: aD
a Difficulty: a1
aEasy
Topic: An a Introduction a to a Complex a Business a Structures
Learning aObjective: 01-01 aUnderstand aand aexplain athe areasons afor aand adifferent amethods aof
a business a expansion, a the a types a of a organizational a structures, a and a the a types a of aacquisitions.
Bloom's: Remember
a AACSB: a Reflective
aThinking a AICPA: FN
a Reporting
3) A abusiness acombination ain awhich athe aacquired acompany's aassets aand aliabilities aare acombined
a with a those a of athe a acquiring a company a into a a a single a entity a is a defined a as:
A) Stock aacquisition
B) Leveraged a buyout
C) Statutory a Merger
D) Reverse a statutory a rollup
, Answer: aC
a Difficulty: a1
aEasy
Topic: Organizational a Structure a and a Financial a Reporting
Learning aObjective: 01-04 aUnderstand aand aexplain athe adifferences abetween adifferent aforms aof
a business a combinations.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
4) In awhich aof athe afollowing asituations ado aaccounting astandards anot arequire athat athe afinancial
astatements a of athe a parent a and a subsidiary a be a consolidated?
A) A acorporation acreates aa a new a100 apercent a owned asubsidiary
B) A acorporation apurchases a90 apercent a of athe avoting astock aof aanother acompany
C) A a corporation a has a both a control a and a majority a ownership a of aan a unincorporated a company
D) A a corporation a owns a less-than a a a controlling a interest a in a an a unincorporated a company
Answer: aD
a Difficulty: a1
aEasy
Topic: Organizational a Structure a and a Financial a Reporting
Learning aObjective: 01-01 aUnderstand aand aexplain athe areasons afor aand adifferent amethods aof
a business a expansion, a the a types a of a organizational a structures, a and a the a types a of aacquisitions.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
During aits ainception, aDevon aCompany apurchased aland afor a$100,000 aand aa abuilding afor
a$180,000. a After aexactly a3 ayears, ait atransferred athese aassets aand acash aof a$50,000 ato aa anewly acreated
asubsidiary, a Regan a Company, a in a exchange a for a 15,000 ashares a of aRegan's a$10 a par a value astock.
a Devon a uses a straight-line a depreciation. a Useful a life a for a the a building a is a30 a years, a with a zero
aresidual a value. a An a appraisal a revealed a that a the a building a has a a a fair a value a of a$200,000.
5) Based aon athe ainformation aprovided, aat athe atime aof athe atransfer, aRegan aCompany ashould arecord:
A) Building a at a $180,000 a and a no a accumulated a depreciation.
B) Building a at a $162,000 a and a no a accumulated a depreciation.
C) Building a at a $200,000 a and a accumulated a depreciation a of a$24,000.
D) Building a at a $180,000 a and a accumulated a depreciation a of a $18,000.
Answer: aD
a Difficulty: a2
aMedium
Topic: Valuation aof aBusiness aEntities; aAccounting afor aInternal aExpansion: aCreating aBusiness
a Entities
Learning aObjective: 01-04 aUnderstand aand aexplain athe adifferences abetween adifferent aforms
a of a business acombinations.; a01-03 aMake acalculations aand aprepare ajournal aentries afor athe acreation
aof aa a business a entity.
Bloom's: Understand
a AACSB: a Analytical
a a a a a a
a 13th Edition
a a
By Theodore Christensen
a a
, Table Of Contents:
1. Intercorporate Acquisitions and Investments in Other Entities
2. Reporting Intercorporate Investments and Consolidation of Wholly Owned
Subsidiaries with No Differential
3. The Reporting Entity and the Consolidation of Less-Than-Wholly-Owned
Subsidiaries with NoDifferential
4. Consolidation of Wholly Owned Subsidiaries Acquired at More Than Book Value
5. Consolidation of Less-Than-Wholly-Owned Subsidiaries Acquired at More Than
Book Value
6. Intercompany Inventory Transactions
7. Intercompany Transfers of Services and Noncurrent Assets
8. Intercompany Indebtedness
9. Consolidation Ownership Issues
10. Additional Consolidation Reporting Issues
11. Multinational Accounting: Foreign Currency Transactions and Financial
Instruments
12. Multinational Accounting: Issues in Financial Reporting and Translation of Foreign
Entity Statements
13. Segment and Interim Reporting
14. SEC Reporting
15. Partnerships: Formation, Operation, and Changes in Membership
16. Partnerships: Liquidation
17. Governmental Entities: Introduction and General Fund Accounting
18. Governmental Entities: Special Funds and Governmentwide Financial Statements
19. Not-for-Profit Entities
20. Corporations in Financial Difficulty
,TEST BANK FOR
a a
Advanced Financial Accounting 13th Edition By Theodore Christensen
a a a a a a a
Chapter a 1 Intercorporate a Acquisitions a and a Investments a in a Other a Entities
1) Assuming ano aimpairment a in avalue aprior ato atransfer, aassets atransferred aby aa aparent acompany ato
a another a entity a it a has a created a should a be a recorded a by athe a newly a created a entity aat a the a assets':
A) cost ato athe aparent acompany.
B) book avalue aon athe aparent a company's abooks aat athe adate aof atransfer.
C) fair avalue aat athe adate aof atransfer.
D) fair avalue aof aconsideration aexchanged abyathe anewly acreated aentity.
Answer: aB
a Difficulty: a1
aEasy
Topic: a Internal aExpansion: aCreating aa aBusiness aEntity; aValuation a of aBusiness aEntities
a Learning a Objective: 01-01 a Understand a and a explain a the a reasons a for a and a different a methods a of
a business aexpansion, athe atypes aof aorganizational astructures, aand athe atypes aof aacquisitions.; a01 a-
03 aMake acalculations aand aprepare ajournal aentries afor athe acreation a of aa abusiness aentity.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
2) Given athe aincreased adevelopment aof acomplex abusiness astructures, awhich aof athe afollowing
aregulators a is a responsible a for a the a continued a usefulness a of aaccounting a reports?
A) Securities a and a Exchange a Commission a (SEC)
B) Public a Company a Accounting a Oversight a Board a (PCAOB)
C) Financial a Accounting a Standards a Board a (FASB)
D) All aof athe aother aanswers aare acorrect
Answer: aD
a Difficulty: a1
aEasy
Topic: An a Introduction a to a Complex a Business a Structures
Learning aObjective: 01-01 aUnderstand aand aexplain athe areasons afor aand adifferent amethods aof
a business a expansion, a the a types a of a organizational a structures, a and a the a types a of aacquisitions.
Bloom's: Remember
a AACSB: a Reflective
aThinking a AICPA: FN
a Reporting
3) A abusiness acombination ain awhich athe aacquired acompany's aassets aand aliabilities aare acombined
a with a those a of athe a acquiring a company a into a a a single a entity a is a defined a as:
A) Stock aacquisition
B) Leveraged a buyout
C) Statutory a Merger
D) Reverse a statutory a rollup
, Answer: aC
a Difficulty: a1
aEasy
Topic: Organizational a Structure a and a Financial a Reporting
Learning aObjective: 01-04 aUnderstand aand aexplain athe adifferences abetween adifferent aforms aof
a business a combinations.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
4) In awhich aof athe afollowing asituations ado aaccounting astandards anot arequire athat athe afinancial
astatements a of athe a parent a and a subsidiary a be a consolidated?
A) A acorporation acreates aa a new a100 apercent a owned asubsidiary
B) A acorporation apurchases a90 apercent a of athe avoting astock aof aanother acompany
C) A a corporation a has a both a control a and a majority a ownership a of aan a unincorporated a company
D) A a corporation a owns a less-than a a a controlling a interest a in a an a unincorporated a company
Answer: aD
a Difficulty: a1
aEasy
Topic: Organizational a Structure a and a Financial a Reporting
Learning aObjective: 01-01 aUnderstand aand aexplain athe areasons afor aand adifferent amethods aof
a business a expansion, a the a types a of a organizational a structures, a and a the a types a of aacquisitions.
Bloom's: Remember
a AACSB: a Reflective
aThinking aAICPA: FN
a Decision a Making
During aits ainception, aDevon aCompany apurchased aland afor a$100,000 aand aa abuilding afor
a$180,000. a After aexactly a3 ayears, ait atransferred athese aassets aand acash aof a$50,000 ato aa anewly acreated
asubsidiary, a Regan a Company, a in a exchange a for a 15,000 ashares a of aRegan's a$10 a par a value astock.
a Devon a uses a straight-line a depreciation. a Useful a life a for a the a building a is a30 a years, a with a zero
aresidual a value. a An a appraisal a revealed a that a the a building a has a a a fair a value a of a$200,000.
5) Based aon athe ainformation aprovided, aat athe atime aof athe atransfer, aRegan aCompany ashould arecord:
A) Building a at a $180,000 a and a no a accumulated a depreciation.
B) Building a at a $162,000 a and a no a accumulated a depreciation.
C) Building a at a $200,000 a and a accumulated a depreciation a of a$24,000.
D) Building a at a $180,000 a and a accumulated a depreciation a of a $18,000.
Answer: aD
a Difficulty: a2
aMedium
Topic: Valuation aof aBusiness aEntities; aAccounting afor aInternal aExpansion: aCreating aBusiness
a Entities
Learning aObjective: 01-04 aUnderstand aand aexplain athe adifferences abetween adifferent aforms
a of a business acombinations.; a01-03 aMake acalculations aand aprepare ajournal aentries afor athe acreation
aof aa a business a entity.
Bloom's: Understand
a AACSB: a Analytical
