A statutory consolidation is a type of business combination in which: A. one of the combining companies survives and the other loses its separate identity. B. one company acquires the voting shares of the other company and the two companies continue to operate as separate legal entities. C. two publicly traded companies agree to share a board of directors. D. each of the combining companies is dissolved and the net assets of both companies an transferred to a newly created corporation. 1. Which of the following observations concerning "goodwill" is NOT correct? A. Once written down, it may be written up for recoveries. B. It must be tested for impairment at least annually C. Goodwill impairment losses are recognized in income from continuing operations or income before extraordinary gains and losses. D. It must be reported as a separate line item in the balance sheet. 2. Under the cost method of accounting for a stock investment, the differential: A. is written off B. is amortized. C. is written down if related to limited-life assets. D. is not amortized or written off. 3