Since 2001, Which Method of Accounting for a Business Combination

question 36

Multiple Choice

Since 2001, which method of accounting for a business combination is required under U.S.GAAP?

• A)Pooling of interest method
• B)Purchase method
• C)Both purchase and pooling of interest methods are allowed
• D)Purchase is required for transnational combinations, but pooling is allowed for domestic combinations.

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Definitions:

Banking System

denotes the network of institutions that provide financial services, including deposits, loans, and currency exchanges.

Collection Float

The time difference between when a check is deposited into a bank account and when the funds are made available.

Availability Delay

The lag time between when a deposit is made into an account and when the funds become available for use.

Collection Float

The time difference between when a check is deposited into a bank account and when the amount is credited to the account, affecting the cash flow.