TEST BANK For Advanced Financial Accounting 13th Edition By Theodore Christensen Chapter 1 - 20 |Complete Newest Version

Test Bank for Advanced Financial Accounting
13th Edition
By Theodore Christensen

,TEST BANK FOR WD WD



Advanced Financial Accounting 13th Edition By Theodore Christensen
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Chapter 1 Intercorporate Acquisitions and Investments in Other Entities
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1) Assuming no impairment in value prior to transfer, assets transferred by a parent c
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ompany to another entity it has created should be recorded by the newly created
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WDentity at the assets':
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A) cost to the parent company.
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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.
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D) fair value of consideration exchanged by the newly created entity.
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Answer: B Diffi WD WD


culty: 1 EasyWD WD


Topic: Internal Expansion: Creating a Business Entity; Valuation of Business E
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ntities Learning Objective:
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01 Understand and explain the reasons for and different methods of business ex
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pansion, the types 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
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W Dentity.
Bloom's:
Remember AACS W D


B: Reflective Thinking AI
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CPA:
FN Decision Maki WD WD


ng

2) Given the increased development of complex business structures, which of the foll
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owing regulators is responsible for the continued usefulness of accounting re
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ports?
A) Securities and Exchange Commission (SEC)
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B) Public Company Accounting Oversight Board (PCAOB)
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C) Financial Accounting Standards Board (FASB)
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D) All of the other answers are correct
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Answer: D Diffi WD WD


culty: 1 EasyWD WD


Topic: An Introduction to Complex Business Structures
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Learning Objective: 01-
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01 Understand and explain the reasons for and different methods of business expansi
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on, the types of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACS W D


B: Reflective Thinking AI
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CPA: FN Reporting WD

,3) A business combination in which the acquired company's assets and liabilities are co
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mbined with those of the acquiring company into a single entity is defined as
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:
A) Stock acquisition
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B) Leveraged buyout WD


C) Statutory Merger
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D) Reverse statutory rollup
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, Answer: C Diffi WD WD


culty: 1 Easy WD WD


Topic: Organizational Structure and Financial Reporting WD WD WD WD


Learning Objective: 01- W D W D W D


04 Understand and explain the differences between different forms of business combina
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tions.
Bloom's:
Remember AACS W D


B: Reflective Thinking AI
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CPA:
FN Decision Maki WD WD


ng

4) In which of the following situations do accounting standards not require that the
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Dfinancial statements 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 Diffi WD WD


culty: 1 Easy WD WD


Topic: Organizational Structure and Financial Reporting WD WD WD WD


Learning Objective: 01- WD W D W D


01 Understand and explain the reasons for and different methods of business expansio
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n, the types of organizational structures, and the types of acquisitions.
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Bloom's:
Remember AACS W D


B: Reflective Thinking AI
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CPA:
FN Decision Maki WD WD


ng

During its inception, Devon Company purchased land for $100,000 and a building f
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or $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a
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newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan'
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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 valu
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e. An appraisal revealed 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.
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B) Building at $162,000 and no accumulated depreciation.
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C) Building at $200,000 and accumulated depreciation of $24,000.
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D) Building at $180,000 and accumulated depreciation of $18,000.
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Answer: D Difficu WD W D


lty: 2 Medium
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Topic:
Valuation of Business Entities; Accounting for Internal Expansion: Creating Bus
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iness Entities W D