Use the Following Statements to Answer This Question

question 22

Multiple Choice

Use the following statements to answer this question:
I. Stock externalities depend on the accumulated results of actions by producers or consumers, not on the incremental results that may occur in a given period of time.
II. Stock externalities are always negative externalities.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II is false.

---

Definitions:

Negative Goodwill

Occurs when the price paid for an acquisition is less than the fair market value of its net tangible assets, often recognized as a gain in the acquirer's financial statements.

Consolidated SFP

Consolidated Statement of Financial Position; a financial statement that presents the total assets, liabilities, and equity of a parent company and its subsidiaries as one single entity.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Negative Goodwill

A financial situation where the price paid for an acquisition is less than the fair market value of its net tangible assets.