Direct Combination Costs and Stock Issuance Costs Are Often Incurred

question 61

Multiple Choice

Direct combination costs and stock issuance costs are often incurred in the process of making a controlling investment in another company. How should those costs be accounted for in a pre-2009 purchase transaction? $$\begin{array} { | l | l | l | } \hline & \text { Direct Combination Costs } & \text { Stock Issuance Costs } \\\hline \text { A) } & \text { Increase Investment } & \text { Decrease Investment } \\\hline \text { B) } & \text { Increase Investment } & \text { Decrease Paid-In Capital } \\\hline \text { C) } & \text { Increase Investment } & \text { Increase Expenses } \\\hline \text { D) } & \text { Decrease Paid-In Capital } & \text { Increase Investment } \\\hline \text { E) } & \text { Increase Expenses } & \text { Decrease Investment } \\\hline\end{array}$$

• A)Option A
• B)Option B
• C)Option C
• D)Option D
• E)Option E

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Definitions:

Cholesterol

A waxy, fat-like substance found in all cells of the body, necessary for the formation of cell membranes, certain hormones, and vitamin D.

Steroids

Organic compounds with four rings arranged in a specific molecular configuration, important in biology, chemistry, and medicine.

Nucleic Acid Derivatives

Molecules derived from nucleic acids, such as nucleotides, which play essential roles in genetic information storage and energy transfer.

Polypeptides

Chains of amino acids linked by peptide bonds, serving as building blocks for proteins.