For Each of the Following Situations,select the Best Answer Concerning

question 26

Essay

For each of the following situations,select the best answer concerning accounting for combinations:
(A)Pooling-of-interests method only.
(B)Purchase method only.
(C)Acquisition method only.
(D)Pooling-of-interests method and purchase method,but not acquisition method.
(E)Purchase method and acquisition method,but not pooling-of-interests method.
(F)Pooling-of-interests method and acquisition method,but not purchase method.
(G)All methods (pooling-of-interests,purchase,and acquisition. )
(H)None of the methods (neither pooling-of-interests,purchase,nor acquisition. )
_____1.Direct costs are expensed.
_____2.Indirect costs are expensed.
_____3.Direct costs reduce the additional paid-in capital of the acquirer.
_____4.Both direct costs and indirect costs increase the investment account.
_____5.Direct costs increase the investment account,and stock issue costs reduce the acquirer's additional paid-in capital account.
_____6.Contingent consideration increases the investment account at date of acquisition.
_____7.Contingent consideration increases the investment account at a date subsequent to the acquisition date.
_____ 8.A bargain purchase reduces the fair value of long-term assets.
_____9.A bargain purchase is ignored or not applicable.
_____10.A bargain purchase is recorded at date of acquisition as a gain (not extraordinary).
_____11.The combination clearly defines an acquired company and an acquiring company.
_____12.Method(s)appropriate to combinations prior to June 30,2001.

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Definitions:

Classical Conditioning

An instructional process where two stimuli are frequently paired together; the response, initially triggered by the second stimulus, is subsequently drawn by the first stimulus alone.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is repeatedly presented without the unconditioned stimulus.

Conditioned Stimulus

A stimulus that was originally neutral but, after association with an unconditioned stimulus, leads to eliciting a conditioned response.

Classical Conditioning

A fundamental learning technique established by the association between an initially neutral stimulus and a naturally occurring stimulus, leading to a learned response.