According to GAAP, Which of the Following Is True with Respect

question 27

Multiple Choice

According to GAAP, which of the following is true with respect to the pooling of interest method of accounting for business combinations?

• A) It was the only method used prior to 2002.
• B) It must be used for all new acquisitions.
• C) GAAP allowed its use prior to 2002.
• D) It, or the acquisition method, may be used at the acquirer's discretion.
• E) GAAP requires it to be used instead of the acquisition method for business combinations for which $50 billion or more in consideration is transferred.

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Definitions:

Apples

In economic and financial contexts, this term is often used metaphorically to represent the comparison of similar items or investments, as in "comparing apples to apples."

Oranges

A citrus fruit characterized by a round shape and a sweet, juicy pulp, commonly consumed fresh or used in beverages.

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, thereby indicating the consumer's preferences.

Bundle

A group of items or services sold together, often at a discounted price compared to purchasing each item separately.