Question $3$

Which of the following statements is false?

I. Goodwill is the excess of acquisition price over the current fair value of the separately identifiable net assets.

II$.$ Goodwill is amortized over its useful life.

III. Goodwill must be periodically tested for impairment.

Question $4$

Company X purchases $40\%$ of Company Y$\text{'}$s stock and has significant influence over Company Y$.$ Which of the following

transactions increases the balance of "Investment in Company Y$"$ account?

I. Initial purchase of Company Y$\text{'}$s stock.

II$.$ Company $Y$ reports $$1,000$ income.

III. Company Y pays $$200$ cash dividends.

Question $5$

Which of the following correctly describes the effect of the types of leases on the company's income and cash flows?

I. Finance leases provide a boost to EBIT and EBITDA.

II$.$ Finance leases provide a boost to net income in the early years of the lease.

III. Finance leases provide a boost to operating cash flows.