Century Company acquires the assets and liabilities of Horizon Company in a nontaxable acquisition. The acquisition results in recognition of a deferred tax liability. Which of the following is a possible explanation for this deferred tax liability?

	A.	The acquisition was a bargain purchase.
	B.	The acquisition's cost equaled Horizon's book value.
	C.	Horizon had previously unreported liabilities.
	D.	The book value of Horizon's buildings was less than their market value.

Acquisition accounting only applies to the acquisition of a business. ASC Topic 805 identifies an initial condition that immediately determines that the transaction is not an acquisition of a business, without further analysis. What is this condition?

	A.	Acquisition of a division within another company.
	B.	Acquisition of only intangible assets.
	C.	Acquisition of a single product line.
	D.	Acquisition of a single identifiable asset.

Packard Company acquires the assets and liabilities of Sutton Company, with an acquisition cost that is less than the fair value of its identifiable net assets. The difference between acquisition cost and the fair value of identifiable net assets acquired:

	A.	Reduces noncurrent assets acquired
	B.	Increases other comprehensive income
	C.	Increases net income on the income statement
	D.	Reduces goodwill

An acquiring company may be motivated to report a larger bargain gain to improve its bottom line. All of the following manipulations could be used to overstate the gain, except which one?

	A.	Understate the discount rate used to measure the fair value of acquired liabilities.
	B.	Understate the present value of an earnings contingency.
	C.	Understate the value of previously unreported intangible assets acquired.
	D.	Understate the value of acquired contingent liabilities such as pending lawsuits.