It Is Important to Distinguish Between Pre-Acquisition and Post-Acquisition Equity

question 42

Multiple Choice

It is important to distinguish between pre-acquisition and post-acquisition equity of a subsidiary to allow:

• A) post-acquisition equity to be eliminated on consolidation.
• B) goodwill or gain on bargain purchase to be calculated.
• C) avoidance of double counting of pre-acquisition equity.
• D) none of the above.

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Definitions:

Streetcars

Rail vehicles that run on tracks along public urban streets and also have routes extending into suburban areas.

Racially Segregated

The enforced separation of different racial groups in daily life, whether by law or through social norms.

Firm's Profits

The financial gains that a company makes after subtracting all its costs from its total revenues.

Human Capital

Proficiencies, education, and experiences attributed to an individual or a group, appraised concerning their fiscal value or expense to a business entity or a national economy.