How Should Accounting Fees for an Acquisition Be Treated

question 32

Multiple Choice

How should accounting fees for an acquisition be treated?

• A)Expensed in the period of acquisition
• B)Capitalized as part of the acquisition cost
• C)Deferred and amortized
• D)Deferred until the company is disposed of or wound-up

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Definitions:

Maturity Date

The date on which a financial obligation or investment becomes due for payment or is settled.

Interest Payment

The payment made by a borrower to a lender as compensation for the use of borrowed money.

Four-Month Note

A promissory note or financial instrument that matures or comes due in four months.

Interest Calculation

The process of determining the interest charge on a loan or financial holding, based on the principal, rate, and period.