In a Transaction Accounted for Using the Acquisition Method Where

question 91

Multiple Choice

In a transaction accounted for using the acquisition method where consideration transferred exceeds book value of the acquired company, which statement is true for the acquiring company with regard to its investment?

• A) Net assets of the acquired company are revalued to their fair values and any excess of consideration transferred over fair value of net assets acquired is allocated to goodwill.
• B) Net assets of the acquired company are maintained at book value and any excess of consideration transferred over book value of net assets acquired is allocated to goodwill.
• C) Acquired assets are revalued to their fair values. Acquired liabilities are maintained at book values. Any excess is allocated to goodwill.
• D) Acquired long-term assets are revalued to their fair values. Any excess is allocated to goodwill.

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Definitions:

Recruitment and Selection

The process of identifying, attracting, and choosing candidates for employment to meet organizational needs and objectives.

Knowledge Sharing

The practice of exchanging information, skills, or expertise among individuals or organizations to benefit all parties.

HRM Practice

Human Resource Management practices involve the strategic management of employees, including recruitment, training, performance evaluation, and employee relations to enhance organizational performance.

Selection System

The process by which organizations evaluate, choose, and hire individuals to fill job vacancies.