Test Bank for Advanced Accounting 7th Edition by Jeter Chaney Sample (Complete And Verified Study material) (26pages) LEARNEXAMS

Question Type: Multiple Choice 1) SFAS 141R requires that all business combinations be accounted for using: a) the pooling of interests method. b) the acquisition method. c) either the acquisition or the pooling of interests methods. d) neither the acquisition nor the pooling of interests methods. Answer: b Question Title: Test Bank (Multiple Choice) Question 01 Difficulty: Easy Learning Objective: 1 Describe the major changes in the accounting for business combinations passed by the FASB in December 2007, and the reasons for those changes. Section Reference: 2.1 2) Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be: a) accounted for as goodwill. b) allocated to reduce current and long-lived assets. c) allocated to reduce current assets and classify any remainder as an extraordinary gain. d) allocated to reduce any previously recorded goodwill on the seller’s books and classify anyremainder as an ordinary gain. Answer: d Question Title: Test Bank (Multiple Choice) Question 02 Difficulty: Easy Learning Objective: 6 Describe the valuation of assets, including goodwill, and liabilities acquiredin a business combination accounted for by the acquisition method. Section Reference: 2.3