The Modified Cash Basis of Accounting Combines Aspects of the Cash

question 10

True/False

The modified cash basis of accounting combines aspects of the cash method of accounting and the accrual method of accounting.

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Definitions:

Acquisition Differential

The difference between the purchase price of an acquired company and the book value of its net assets.

Acquisition Differential

The difference between the cost of the acquisition and the fair value of the net assets acquired in a business combination.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not full control.

Unamortized

Describes a portion of a loan or bond or other asset that has not yet been written off or paid down through periodic payments.