Test Bank
Advanced Accounting,
By Joe Ben Hoyle, Schaefer And Doupnik
15th Edition
,Chapter 01
Consolidation Of Financial Information
Multiple Choice Questions
1. At The Date Of An Acquisition Which Is Not A Bargain Purchase,
The Acquisition Method
A. Consolidates The Subsidiary's Assets At Fair Value And The Liabilities
At Book Value.
B. Consolidates All Subsidiary Assets And Liabilities At
Book Value.
C. Consolidates All Subsidiary Assets And Liabilities
At Fair Value.
D. Consolidates Current Assets And Liabilities At Book Value, Long-Term
Assets And Liabilities At Fair Value.
E. Consolidates The Subsidiary's Assets At Book Value And The
Liabilities At Fair Value.
,2. In An Acquisition Where Control Is Achieved, How Would The Land
Accounts Of The Parent And The Land Accounts Of The Subsidiary
Be Combined?
A. Option
A
B. Option
B
C. Option
C
D. Option
D
E. Option
E
3. Lisa Co. Paid Cash For All Of The Voting Common Stock Of Victoria
Corp. Victoria Will Continue To Exist As A Separate Corporation. Entries
For The Consolidation Of Lisa And Victoria Would Be Recorded In
A. A
Worksheet.
B. Lisa's General
Journal.
C. Victoria's General
Journal.
D. Victoria's Secret Consolidation
Journal.
E. The General Journals Of Both
Companies.
, 4. Using The Acquisition Method For A Business Combination, Goodwill
Is Generally Defined As:
A. Cost Of The Investment Less The Subsidiary's Book Value At
The Beginning Of The Year.
B. Cost Of The Investment Less The Subsidiary's Book Value At The
Acquisition Date.
C. Cost Of The Investment Less The Subsidiary's Fair Value At
The Beginning Of The Year.
D. Cost Of The Investment Less The Subsidiary's Fair Value At
Acquisition Date.
E. Is No Longer Allowed
Under Federal Law.
5. Direct Combination Costs And Stock Issuance Costs Are Often Incurred
In The Process Of Making A Controlling Investment In Another
Company. How Should Those Costs Be Accounted For In A Pre-2009
Purchase Transaction?
A. Option
A
B. Option
B
C. Option
C
D. Option
D
E. Option
E
Advanced Accounting,
By Joe Ben Hoyle, Schaefer And Doupnik
15th Edition
,Chapter 01
Consolidation Of Financial Information
Multiple Choice Questions
1. At The Date Of An Acquisition Which Is Not A Bargain Purchase,
The Acquisition Method
A. Consolidates The Subsidiary's Assets At Fair Value And The Liabilities
At Book Value.
B. Consolidates All Subsidiary Assets And Liabilities At
Book Value.
C. Consolidates All Subsidiary Assets And Liabilities
At Fair Value.
D. Consolidates Current Assets And Liabilities At Book Value, Long-Term
Assets And Liabilities At Fair Value.
E. Consolidates The Subsidiary's Assets At Book Value And The
Liabilities At Fair Value.
,2. In An Acquisition Where Control Is Achieved, How Would The Land
Accounts Of The Parent And The Land Accounts Of The Subsidiary
Be Combined?
A. Option
A
B. Option
B
C. Option
C
D. Option
D
E. Option
E
3. Lisa Co. Paid Cash For All Of The Voting Common Stock Of Victoria
Corp. Victoria Will Continue To Exist As A Separate Corporation. Entries
For The Consolidation Of Lisa And Victoria Would Be Recorded In
A. A
Worksheet.
B. Lisa's General
Journal.
C. Victoria's General
Journal.
D. Victoria's Secret Consolidation
Journal.
E. The General Journals Of Both
Companies.
, 4. Using The Acquisition Method For A Business Combination, Goodwill
Is Generally Defined As:
A. Cost Of The Investment Less The Subsidiary's Book Value At
The Beginning Of The Year.
B. Cost Of The Investment Less The Subsidiary's Book Value At The
Acquisition Date.
C. Cost Of The Investment Less The Subsidiary's Fair Value At
The Beginning Of The Year.
D. Cost Of The Investment Less The Subsidiary's Fair Value At
Acquisition Date.
E. Is No Longer Allowed
Under Federal Law.
5. Direct Combination Costs And Stock Issuance Costs Are Often Incurred
In The Process Of Making A Controlling Investment In Another
Company. How Should Those Costs Be Accounted For In A Pre-2009
Purchase Transaction?
A. Option
A
B. Option
B
C. Option
C
D. Option
D
E. Option
E
