Ch#3 Review - Advanced Accounting Chapter 3 Acquisitions Juan Lewis Name Date 1 Under the acquisition method indirect costs relating to

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Advanced Accounting Chapter 3 Acquisitions Juan Lewis Name: __________________________ Date: _____________ 1. Under the acquisition method, indirect costs relating to acquisitions should be A) included in the investment cost. B) expensed as incurred. C) deducted from other contributed capital. D) none of these. 2. Eliminating entries are made to cancel the effects of intercompany transactions and are made on the A) books of the parent company. B) books of the subsidiary company. C) workpaper only. D) books of both the parent company and the subsidiary. 3. One reason a parent company may pay an amount less than the book value of the subsidiary's stock acquired is A) an undervaluation of the subsidiary's assets. B) the existence of unrecorded goodwill. C) an overvaluation of the subsidiary's liabilities. D) none of these. 4. In a business combination accounted for as an acquisition, registration costs related to common stock issued by the parent company are A) expensed as incurred. B) deducted from other contributed capital. C) included in the investment cost. D) deducted from the investment cost. Page 1
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5. On the consolidated balance sheet, consolidated stockholders' equity is A) equal to the sum of the parent and subsidiary stockholders' equity. B) greater than the parent's stockholders' equity. C) less than the parent's stockholders' equity. D) equal to the parent's stockholders' equity. 6. Majority-owned subsidiaries should be excluded from the consolidated statements when A) control does not rest with the majority owner. B)
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This note was uploaded on 02/22/2012 for the course ACCOUNTING 401 taught by Professor Jeter during the Spring '12 term at Kaplan University.

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Ch#3 Review - Advanced Accounting Chapter 3 Acquisitions Juan Lewis Name Date 1 Under the acquisition method indirect costs relating to

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