When There Is a Price Floor There Will Be

question 184

Multiple Choice

When there is a price floor there will be

• A)a shortage.
• B)a surplus.
• C)either a shortage or a surplus.
• D)neither a shortage nor a surplus.

---

Definitions:

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.

Acquisition Method

An approach in accounting for business combinations where the acquiring entity is treated as having purchased the net assets of the acquiree.

Direct and Indirect Costs

Direct costs are directly traceable to a product or service, while indirect costs are not directly attributable to a single product or service, such as overhead expenses.