Exam 1: Introduction to Business Combinations and the Conceptual Framework

The view that only the parent company's share of the unrealized intercompany profit recognized by the selling affiliate that remains in assets should be eliminated in the preparation of consolidated financial statements is consistent with the

When following the parent company concept in the preparation of consolidated financial statements, noncontrolling interest in combined income is considered a(n)

The view that the noncontrolling interest in income reflects the noncontrolling stockholders' allocated share of consolidated income is consistent with the

The first step in estimating goodwill in the excess earnings approach is to

Which of the following is not a component of other comprehensive income under GAAP?

Under the economic unit concept, noncontrolling interest in net assets is treated as

Which of the following statements is correct?

Many of FASB's recent pronouncements indicate a shift away from historical cost accounting toward

The view that consolidated financial statements represent those of a single economic entity with several classes of stockholder interest is consistent with the

When a new corporation is formed to acquire two or more other corporations and the acquired corporations cease to exist as separate legal entities, the result is a statutory

The parent company concept adjusts subsidiary net asset values for the

The parent company concept of consolidation represents the view that the primary purpose of consolidated financial statements is:

A merger between a supplier and a customer is a(n)

The difference between normal earnings and expected future earnings is

Under the parent company concept, consolidated net income __________ the consolidated net income under the economic unit concept.

A firm can use which method of financing for an acquisition structured as either an asset or stock acquisition?

Estimated goodwill is determined by computing the present value of the

Which of the following statements is correct?

Which of the following statements would not be a valid or logical reason for entering into a business combination?

When following the economic unit concept in the preparation of consolidated financial statements, the basis for valuing the noncontrolling interest in net assets is the