If the Fair Value of the Net Assets Acquired in a Business

question 29

Multiple Choice

If the fair value of the net assets acquired in a business combination is greater than the purchase price, the difference is called

• A) organizational costs.
• B) contributed surplus.
• C) purchased goodwill.
• D) negative goodwill or bargain purchase.

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Definitions:

Payee

The party to whom payment of a promissory note is to be made.

Drawee

The party in a transaction who is directed to pay a certain amount of money, often seen in the context of a check or draft.

Internal Control

Processes and procedures implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Limitations

Restrictions or constraints that limit the scope, effectiveness, or action of something.