In Recording the Acquisition Cost of an Entire Business

question 48

Multiple Choice

In recording the acquisition cost of an entire business:

• A)goodwill is recorded as the excess of cost over the fair market value of identifiable net assets.
• B)assets are recorded at the seller's book values.
• C)goodwill,if it exists,is never recorded.
• D)goodwill is recorded as the excess of cost over the book value of identifiable net assets.

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Definitions:

Automaker

A company that manufactures and sells vehicles, including cars, trucks, and motorcycles.

Acquires

Obtains ownership or control of another company or asset through purchase or merger.

Split-Up

The splitting up of a company into two or more companies.