Which of the Following Statements Is Correct

question 20

Multiple Choice

Which of the following statements is correct?

• A) Under the New Entity Method, both of the company's net assets are recorded at their fair market values for these assets on the date of acquisition.
• B) Under the Acquisition Method, the acquirer company's net assets are recorded at the price paid for the assets on the date of acquisition.
• C) As of January 1^st, 2011, the New Entity Method must be used to account for business combinations where an acquirer can be identified.
• D)The Acquisition Method is consistent with the historical cost principle while the New Entity Method is not.

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Definitions:

Consumerism

The preoccupation with and an inclination towards the buying of consumer goods.

Economic Prosperity

A state of flourishing financial health and growth, marked by a high level of income, low unemployment, and sustainable development.

1920s

A decade marked by significant cultural, economic, and political changes worldwide, known for economic prosperity, the Prohibition era, and the Jazz Age in the United States.

1950s

A decade marked by post-World War II recovery, significant cultural shifts, economic prosperity in the West, and the heightening of the Cold War.