In the Terminology Suggested by the FASB, Which of the Following

question 62

Multiple Choice

In the terminology suggested by the FASB, which of the following terms refers to the accounting entity that results from a business combination?

• A)Parent enterprise
• B)Combined enterprise
• C)Consolidated enterprise
• D)Controlling enterprise

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Definitions:

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Raw Materials

Basic, unprocessed inputs used in manufacturing or production processes to create finished goods.

Indirect Materials

Materials used in the production process that cannot be directly traced to a finished product.

Employer Payroll Taxes

Taxes that employers are required to pay on behalf of their employees, including Social Security and Medicare taxes in the United States.