Chapter 2 Quiz - 5 Henry Camacho Ch 02 ACC 9805 Results...

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5 Henry Camacho Ch 02 ACC 9805 Results Reporter Out of 15 questions, you answered 15 correctly with a final grade of 100% 15 correct (100%) 0 incorrect (0%) 0 unanswered (0%) Your Results: The correct answer for each question is indicated by a . 1 CORRECT In 2004, GAAP expanded the definition of 'control' and addressed the definition and consolidation requirements for: A) Less than 50% owned subsidiaries. B) Foreign Subsidiaries. C) Permanently Impaired Subsidiaries. D) Variable Interest Entities. E) Entities financed with subordinated debt. 2 CORRECT Using the acquisition method, a company acquires all of the shares of stock of another company. In-process research and development exists and is estimated to have $300,000 fair value. How would you account for these costs? A) Always expense these costs at the acquisition date. B) Expense these costs unless such costs represent assets with alternative future use. C) Recognize these costs as an intangible asset and amortize the cost over a reasonable life. D) Recognize these costs as an intangible asset and test for impairment. E) These costs have no impact on the purchase.
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3 CORRECT Using the acquisition method, which of the following costs incurred in bringing about a business combination accounted for as a purchase should enter into determining the net income of the combined company for the period in which the expenses are incurred? A) A B) B C) C D) D E) E 4 CORRECT In accounting for a business combination as a purchase, a bargain purchase exists when: A) purchase price > book value.
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