ACC-690

Module 6-2

Quiz

Question #9

Which of the following statements is true regarding the acquisition method of accounting for a business combination?

0 Net assets of the acquired company are reported at their book values.

0 Net assets of the required company are reported at their fair values.

0 Indirect cost of the combination reduce additional paid-in capital.

0 The acquisition can only be effected by a mutual exchange of voting common stock.

0 Any goodwill associated with the acquisition is reported as a development cost.