TEST BANK For Advanced Financial Accounting 13th Edition By Theodore Christensen | Complete Chapter's 1 - 20 | 100 % Verified

TEST BANK
Advanced Financial Accounting13th
Edition
By Theodore Christensen ALL CHAPTERS 1 TO 20
COVERED

,TABLE OF CONTENT
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PREFACE1. Intercorporate Acquisitions and Investments in Other Entities
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2. Reporting Intercorporate Investments and Consolidation of Wholly Owned Subsidiaries with No Differential
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3. The Reporting Entity and the Consolidation of Less-Than-Wholly-Owned Subsidiaries with NoDifferential
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4. Consolidation of Wholly Owned Subsidiaries Acquired at More Than Book Value
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5. Consolidation of Less-Than-Wholly-Owned Subsidiaries Acquired at More Than Book Value
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6. Intercompany Inventory Transactions
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7. Intercompany Transfers of Services and Noncurrent Assets
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8. Intercompany Indebtedness
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9. Consolidation Ownership Issues
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10. Additional Consolidation Reporting Issues
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11. Multinational Accounting: Foreign Currency Transactions and Financial Instruments
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12. Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements
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13. Segment and Interim Reporting
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14. SEC Reporting
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15. Partnerships: Formation, Operation, and Changes in Membership
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16. Partnerships: Liquidation
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17. Governmental Entities: Introduction and General Fund Accounting
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18. Governmental Entities: Special Funds and Governmentwide Financial Statements
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19. Not-for-Profit Entities
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20. Corporations in Financial Difficulty
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Chapter 1 UI Intercorporate Acquisitions and Investments in Other Entities U I U I U I U I U I U I




1) Assuming no impairment in value prior to transfer, assets transferred by a parent company t
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oanother entity it has created should be recorded by the newly created entity at the assets':
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A) cost to the parent company. UI UI UI U I




B) book value on the parent company's books at the date of transfer.
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C) fair value at the date of transfer. U I UI UI U I UI UI




D) fair value of consideration exchanged by the newly created entity.
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Answer: B Diffic U I UI




ulty: 1 Easy UI UI




Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities Learning
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Objective: 01-
01 Understand and explain the reasons for and different methods of business expansion, the type
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s of organizational structures, and the types of acquisitions.; 01 -
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03 Make calculations and prepare journal entries for the creation of a business entity.
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Bloom's:
Remember AACSB: UI




U Reflective ThinkingAICPA:
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FN Decision Making UI UI




2) Given the increased development of complex business structures, which of the followingregu
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lators is responsible for the continued usefulness of accounting reports?
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A) Securities and Exchange Commission (SEC) U I U I U I U I




B) Public Company Accounting Oversight Board (PCAOB) U I U I U I U I U I




C) Financial Accounting Standards Board (FASB) U I U I U I U I

,D) All of the other answers are correct
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Answer: D Diffic U I UI




ulty: 1 Easy UI UI




Topic: An Introduction to Complex Business Structures UI U I U I U I U I




Learning Objective: 01- UI




01 Understand and explain the reasons for and different methods ofbusiness expansion, the type
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I UI U I UI




s of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB: UI




U Reflective ThinkingAICPA:
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I




FN Reporting UI




3) A business combination in which the acquired company's assets and liabilities are combinedwith
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those of the acquiring company into a single entity is defined as:
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A) Stock acquisition UI




B) Leveraged buyout UI




C) Statutory Merger UI




D) Reverse statutory rollup U I UI

, Answer: C Diffic U I UI




ulty: 1 Easy UI UI




Topic: Organizational Structure and Financial Reporting U I U I U I U I




Learning Objective: 01- UI




04 Understand and explain the differences between different forms ofbusiness combinations.
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I UI




Bloom's:
Remember AACSB: UI




UReflective ThinkingAICPA:
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I




FN Decision Making UI UI




4) In which of the following situations do accounting standards not require that the financia
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lstatements of the parent and subsidiary be consolidated?
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A) A corporation creates a new 100 percent owned subsidiary
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B) A corporation purchases 90 percent of the voting stock of another company
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C) A corporation has both control and majority ownership of an unincorporated company
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D) A corporation owns less-than a controlling interest in an unincorporated company
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Answer: D Diffic U I UI




ulty: 1 Easy UI UI




Topic: Organizational Structure and Financial Reporting U I U I U I U I




Learning Objective: 01- UI




01 Understand and explain the reasons for and different methods ofbusiness expansion, the types
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I UI U I UI U




of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACSB: UI




UReflective ThinkingAICPA:
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I




FN Decision Making UI UI




During its inception, Devon Company purchased land for $100,000 and a building for $180,000. Aft
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er exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary,Regan
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I UI




Company, in exchange for 15,000 shares of Regan's $10 par value stock. Devon uses straight-
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line depreciation. Useful life for the building is 30 years, with zero residual value. An appraisal rev
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ealed that the building has a fair value of $200,000.
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5) Based on the information provided, at the time of the transfer, Regan Company should record:
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A) Building at $180,000 and no accumulated depreciation. U I U I U I U I U I U I




B) Building at $162,000 and no accumulated depreciation. UI U I U I U I U I U I




C) Building at $200,000 and accumulated depreciation of $24,000. U I U I U I U I U I U I UI




D) Building at $180,000 and accumulated depreciation of $18,000. U I U I U I U I U I U I U I




Answer: D Difficulty UIUI UI




: 2 Medium
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Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Busines U I UI U I U I U I U I U I U I U I




s Entities
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Learning Objective: 01- UI




04 Understand and explain the differences between different forms of business combinations.; 01-
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03 Make calculations and prepare journal entries for the creation of a business entity.
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Bloom's:
Understand AACSB UI




: Analytical ThinkingAICPA:
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I