Which of the Following Is False Regarding Contingent Consideration in Business

question 92

Multiple Choice

Which of the following is false regarding contingent consideration in business combinations?

• A) Contingent consideration payable in cash is reported under liabilities.
• B) Contingent consideration payable in stock shares is reported under stockholders' equity.
• C) Contingent consideration is recorded because of its substantial probability of eventual payment.
• D) The contingent consideration fair value is recognized as part of the acquisition regardless of whether eventual payment is based on future performance of the target firm or future stock price of the acquirer.
• E) Contingent consideration is reflected in the acquirer's balance sheet at the present value of the potential expected future payment.

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Definitions:

Cultural-Transmission

The process by which culture, including knowledge, customs, and values, is passed down from one generation to the next.

Deviance

Behaviors or actions that violate societal norms or expectations, which can range from minor to serious offenses, eliciting social reactions.

Strain

Refers to breakdowns in traditional norms that precede collective action.

Capital Punishment

A legal process where the state executes someone as punishment for a crime.