QUESTION 15

In an acquisition, the company whose assets are acquired:

	a.	will go out of existence.
	b.	will become a subsidiary of the acquiring company.
	c.	will be dissolved along with the acquiring company to form a new corporation.
	d.	None of the above are correct.

QUESTION 16

1. The founders of an acquired company are granted a contingent payment for three years after the acquisition based on those years earnings:

   	a.	The acquirer typically recognizes the payment as goodwill when the contingency is resolved and payment is given.
   	b.	The acquirer typically recognizes the payment as goodwill when the contingency is resolved.
   	c.	The acquirer typicall includes the expected payments based on future earnings as goodwill at acquisition.
   	d.	The acquirer typically amortizes contingencies over the applicable award period.