Making Assumptions Can Have Both Positive and Negative Implications

question 3

Multiple Choice

Making assumptions can have both positive and negative implications. Which of the following is NOT a negative aspect of making assumptions?

• A) Anticipating problem situations
• B) Jumping to conclusions
• C) Stereotyping
• D) Focusing on intentions

---

Definitions:

Fair Value

The compensation for parting with an asset or the financial burden of settling a liability in an orderly market operation as of the measurement checkpoint.

Acquisition Method

An accounting technique used to consolidate the financial statements of two companies when one acquires the other.

Subsidiary's Fair Value

The estimated market value of a subsidiary company if its assets were to be sold or the company were to be acquired as a whole.

Goodwill

A non-physical asset that is recognized when one company purchases another at a price higher than the sum of the net value of its identifiable assets.