Test Bank for Advanced Financial Accounting 13th
n n n n n nn n
Edition n
By Theodore Christensen
n n
,TEST BANK FOR
n n
Advanced Financial Accounting 13th Edition By Theodore Christensen
n n n n n n n
Chaptern 1 Intercorporaten Acquisitionsn andn Investmentsn inn Othern Entities
1) Assumingnnonimpairmentninnvaluenpriorntontransfer,nassetsntransferrednbynanparentncompanynton
anothernentitynitnhasncreatednshouldnbenrecordednbynthennewlyncreatednentitynatnthenassets':
A) costntonthenparentncompany.
B) booknvaluenonnthenparentn company'snbooksnatnthendatenofntransfer.
C) fairnvaluenatnthendatenofntransfer.
D) fairnvaluenofnconsiderationnexchangednbynthennewlyncreatednentity.
Answer:nBnDiffic
ulty:n1nEasy
Topic:n InternalnExpansion:nCreatingnanBusinessnEntity;n ValuationnofnBusinessnEntitiesnLearnin
gn Objective: 01-
01n Understandnandnexplainnthenreasonsnfornandndifferentnmethodsnofnbusinessnexpansion,nthentyp
esnofnorganizationalnstructures,nandnthentypesnofnacquisitions.;n01n-
03n Makencalculationsnandnpreparenjournalnentriesnfornthencreationnofnanbusinessnentity.
Bloom's:
RemembernAACSB:
n ReflectivenThinkingn AICPA:
FNn Decisionn Making
2) Givennthenincreasedndevelopmentnofncomplexnbusinessnstructures,nwhichnofnthenfollowingn
regulatorsnisnresponsiblenfornthencontinuednusefulnessnofnaccountingnreports?
A) Securitiesn andn Exchangen Commissionn (SEC)
B) Publicn Companyn Accountingn Oversightn Boardn (PCAOB)
C) Financialn Accountingn Standardsn Boardn (FASB)
D) Allnofnthenothernanswersnarencorrect
Answer:nDn Diffic
ulty:n1nEasy
Topic: Ann Introductionn ton Complexn Businessn Structures
Learningn Objective: 01-
01nUnderstandnandnexplainnthenreasonsnfornandndifferentnmethodsnofnbusinessnexpansion,nthenty
pesnofnorganizationalnstructures,nandnthentypesnofnacquisitions.
Bloom's:
RemembernAACSB:
n ReflectivenThinking n AICPA:
FNn Reporting
3) Anbusinessncombinationninnwhichnthenacquiredncompany'snassetsnandnliabilitiesnarencombinedn
withnthosenofnthenacquiringncompanynintonansinglenentitynisndefinednas:
A) Stocknacquisition
B) Leveragedn buyout
C) Statutoryn Merger
4) Innwhichnofnthenfollowingnsituationsndonaccountingnstandardsnnotnrequirenthatnthenfinancialns
tatementsnofnthenparentnandnsubsidiarynbenconsolidated?
A) Ancorporationncreatesnannewn100npercentn ownednsubsidiary
B) Ancorporationnpurchasesn90npercentn ofnthenvotingnstocknofnanothern company
C) An corporationn hasn bothn controln andn majorityn ownershipn ofn ann unincorporatedn company
D) An corporationn ownsn less-thann an controllingn interestn inn ann unincorporatedn company
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