Under the Acquisition Method of Accounting for a Business Combination

question 12

Multiple Choice

Under the acquisition method of accounting for a business combination, a bargain purchase is

• A) Reported as goodwill in the balance sheet.
• B) Tested annually for impairment.
• C) Reported as a gain in the income statement.
• D) Reported as an adjustment to other comprehensive income.

---

Definitions:

Disposition-based

Pertains to characteristics or tendencies inherent in an individual that influence behavior or attitudes.

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something, often seen as foundational in relationships and organizations.

Chain of Command

A system in organizations where authority and commands flow downward from the top through a series of executive positions or military ranks where each person is responsible to a superior.

Affect-based

Relating to, arising from, or influencing emotions or feelings.