Accounting for Business Combinations
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
Which of the following statements is correct?
1. Personal creditors have first claim on partnership assets.
2. Partnership creditors have first claim on partnership assets.
3. Partnership creditors hav
1. Job order costing: direct labor cost may be the relevant activity base
Process costing: Machine hours may be the relevant activity base
2. Activity based costing (ABC): An overhead cost-allocation system that allocates
overhead to multiple activit
1. Cost Behavior Analysis is the study of how specific costs respond to changes in the
level of business activity.
- Activity level selected is called activity or volume index
- Activity index: variable, fixed, or mixed
2. Variable Costs: Costs that
1. Process cost system: An accounting system used to apply costs to similar products
that are mass-produced in a continuous fashion.
2. Perform routine, repetitive services- process cost system
- Job Cost System:
1. assigned to each j
Pasadena City College
Ch 15 Job Oder Costing
1. Cost accounting: An area of accounting that involves measuring, recording, and reporting
2. Cost accounting system: Manufacturing-cost accounts that are fully integrated into the
Pasadena City College
Ch 14 Managerial Accounting Basics
1. economic and financial information for managers and other internal users. applies to all
types of businesses
2. Internal Users; Internal Reports; Specialty; pertain to subunits, ext
Accounting for Nongovernment Nonbusiness Organizations: Colleges and
Universities, Hospitals, and Other Healthcare Organizations
Special entities are not-for-profit organizations that are
a. government owned.
b. privately own
Elimination of Unrealized Profit on Intercompany Sales of Inventory
Sales from one subsidiary to another are called
a. downstream sales.
b. upstream sales.
c. intersubsidiary sales.
d. horizontal sales.
Insolvency Liquidation and Reorganization
A corporation that is unable to pay its debts as they become due is:
When a business becomes insolvent, it generally has th
Changes in Ownership Interest
When the parent company sells a portion of its investment in a subsidiary, the workpaper entry to
adjust for the current years income sold to noncontrolling stockholders includes a
a. debit to Sub
Consolidated Financial StatementsDate of Acquisition
A majority-owned subsidiary that is in legal reorganization should normally be accounted for using
a. consolidated financial statements.
b. the equity method.
c. the market
Consolidated Financial Statements after Acquisition
An investor adjusts the investment account for the amortization of any difference between cost and
book value under the
a. cost method.
b. complete equity method.
c. partial equity method.