Test Bank for Advanced Accounting 11th Edi
m m m m m mm
tion Hoyle, Schaefer, Doupnik
m m m
Multiple m Choice m Questions
1. Atmthemdatemo fmanmacquisition m whichmis mnotm a mbargainm purchase,m th
emacquisitionmm ethod
A. consolidates mthemsubsidiary's massets matm fairm valuem andm the m liabilities ma
tmbookmvalue.
B. consolidates mallmsubsidiarym assets mandm liabilities ma
tmbookmvalue.
C. consolidates mallmsubsidiarym assets mandm liabilities mat
mfairmvalue.
D. consolidates mcurrentmassets mandm liabilities matmbookm value,m long-
term massets m andm liabilities m atm fairm value.
E. consolidates mthemsubsidiary's massets matm bookm valuem andm them liabilities
matmfairmvalue.
, Fullm filematmhttps://testbankscafe.eu
/
2. Inmanmacquisitionm wherem controlmis machieved,m how m wouldm them landm
accounts mofm them parentmandm them landmaccounts mo fm themsubsidiarym b
emcombined?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
3. Lisa mCo.mpaidmcashm form allmo fm them vo tingm common mstockmo fm Victoria m Corp
.mVictoria mwillmcontinuem to mexist mas ma mseparatemcorpo ration.mEntries m for mt
hemconsolidation mo fm Lisa m andm Victoria m wouldm be mrecordedmin
A. amworksheet
.
B. Lisa's mgeneral
mjournal.
C. Victoria's mgeneral
mjournal.
D. Victoria's msecretm consolidation
mjournal.
E. themgeneralmjournals mo fmbot
hmcompanies.
,4. Usingmthem acquisition m methodm forma m business m com bination,m goodwillmi
s mgenerallym definedmas:
A. Costmofmtheminvestm entm less m themsubsidiary's m bookmvaluematm the
mbeginningmofmthemyear.
B. Costmofmtheminvestm entm less m themsubsidiary's m bookmvaluematm the
macquisition m date.
C. Costmofmtheminvestm entm less m themsubsidiary's m fair mvaluematm the
mbeginningmofmthemyear.
D. Costmofmtheminvestm entm less m themsubsidiary's m fair mvaluemat
macquisition m date.
E. is mno mlongermallo wedm under
mfederalm law.
5. Directmcom bination mcosts mandmstockmissuancem costs maremo ften mincurredmi
nmthemprocess mo fmm akingma m contro llingminvestmentminmanotherm com pany.
m Howmshould mthose mcosts m be m accounted m fo rmin m a m pre-
2009m purchasem transaction?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
, Fullm filematmhttps://testbankscafe.eu
/
6. Howmaremdirectmandmindirectmcosts maccountedm fo rm whenmapplyingm th
emacquisitionmm ethodm form a mbusiness mcom bination?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
7. Whatmis m them primarym accountingm difference m between maccountingm fo rm
whenm themsubsidiarymis m disso lvedmandm whenm themsubsidiarym retains mits
m incorporation?
A. Ifmthemsubsidiarymis m dissolved,mitm willm notm bemoperatedmas m
a mseparatem division.
B. Ifmthemsubsidiarymis m disso lved, massets mand m liabilities maremconso lidate
dmatmtheirm bookm values.
C. Ifmthemsubsidiarymretains mits mincorporation,m there mwillmbe mno mgoodwil
lmassociatedm withm themacquisition.
D. Ifmthemsubsidiarym retains mits mincorporation,massets mandmliabilities mar
emconsolidatedmatm theirm bookmvalues.
E. Ifmthemsubsidiarym retains mits mincorporatio n,m them consolidatio n mis mno
tmformallym recorded minm the maccountingm records mo fm themacquiringmc
ompany.
m m m m m mm
tion Hoyle, Schaefer, Doupnik
m m m
Multiple m Choice m Questions
1. Atmthemdatemo fmanmacquisition m whichmis mnotm a mbargainm purchase,m th
emacquisitionmm ethod
A. consolidates mthemsubsidiary's massets matm fairm valuem andm the m liabilities ma
tmbookmvalue.
B. consolidates mallmsubsidiarym assets mandm liabilities ma
tmbookmvalue.
C. consolidates mallmsubsidiarym assets mandm liabilities mat
mfairmvalue.
D. consolidates mcurrentmassets mandm liabilities matmbookm value,m long-
term massets m andm liabilities m atm fairm value.
E. consolidates mthemsubsidiary's massets matm bookm valuem andm them liabilities
matmfairmvalue.
, Fullm filematmhttps://testbankscafe.eu
/
2. Inmanmacquisitionm wherem controlmis machieved,m how m wouldm them landm
accounts mofm them parentmandm them landmaccounts mo fm themsubsidiarym b
emcombined?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
3. Lisa mCo.mpaidmcashm form allmo fm them vo tingm common mstockmo fm Victoria m Corp
.mVictoria mwillmcontinuem to mexist mas ma mseparatemcorpo ration.mEntries m for mt
hemconsolidation mo fm Lisa m andm Victoria m wouldm be mrecordedmin
A. amworksheet
.
B. Lisa's mgeneral
mjournal.
C. Victoria's mgeneral
mjournal.
D. Victoria's msecretm consolidation
mjournal.
E. themgeneralmjournals mo fmbot
hmcompanies.
,4. Usingmthem acquisition m methodm forma m business m com bination,m goodwillmi
s mgenerallym definedmas:
A. Costmofmtheminvestm entm less m themsubsidiary's m bookmvaluematm the
mbeginningmofmthemyear.
B. Costmofmtheminvestm entm less m themsubsidiary's m bookmvaluematm the
macquisition m date.
C. Costmofmtheminvestm entm less m themsubsidiary's m fair mvaluematm the
mbeginningmofmthemyear.
D. Costmofmtheminvestm entm less m themsubsidiary's m fair mvaluemat
macquisition m date.
E. is mno mlongermallo wedm under
mfederalm law.
5. Directmcom bination mcosts mandmstockmissuancem costs maremo ften mincurredmi
nmthemprocess mo fmm akingma m contro llingminvestmentminmanotherm com pany.
m Howmshould mthose mcosts m be m accounted m fo rmin m a m pre-
2009m purchasem transaction?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
, Fullm filematmhttps://testbankscafe.eu
/
6. Howmaremdirectmandmindirectmcosts maccountedm fo rm whenmapplyingm th
emacquisitionmm ethodm form a mbusiness mcom bination?
A. Optionm
A
B. Option
mB
C. Option
mC
D. Option
mD
E. Option
mE
7. Whatmis m them primarym accountingm difference m between maccountingm fo rm
whenm themsubsidiarymis m disso lvedmandm whenm themsubsidiarym retains mits
m incorporation?
A. Ifmthemsubsidiarymis m dissolved,mitm willm notm bemoperatedmas m
a mseparatem division.
B. Ifmthemsubsidiarymis m disso lved, massets mand m liabilities maremconso lidate
dmatmtheirm bookm values.
C. Ifmthemsubsidiarymretains mits mincorporation,m there mwillmbe mno mgoodwil
lmassociatedm withm themacquisition.
D. Ifmthemsubsidiarym retains mits mincorporation,massets mandmliabilities mar
emconsolidatedmatm theirm bookmvalues.
E. Ifmthemsubsidiarym retains mits mincorporatio n,m them consolidatio n mis mno
tmformallym recorded minm the maccountingm records mo fm themacquiringmc
ompany.
