DEF IncIs Contemplating a Business Combination Involving GHI Inc

question 67

Multiple Choice

DEF Inc.is contemplating a business combination involving GHI Inc.DEF can either purchase the assets and liabilities of GHI Inc,or it can engage in a Pooling of Interests with GHI Inc.Assuming that the Fair Market Values of GHI's identifiable assets are equal to their book values,which method would show a higher net income for the consolidated entity (assume that the Pooling of Interests Method is allowable) ?

• A)The Purchase Method)
• B)The Pooling of Interests Method)
• C)The Purchase Method and The Pooling of Interests Method would show the same income.
• D)It depends on the accounting policies used by each company.

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Definitions:

Personal Influence

Personal influence refers to the impact an individual's behavior, opinions, or actions have on others, often affecting their decisions or perceptions.

Location Segmentation

The process of dividing a market into segments based on the geographical locations of consumers to target marketing efforts more precisely.

Organizational Influences

Factors within a company that affect its operations and culture, including management practices, organizational structure, and internal communication.

Government Regulation

Statutory rules and directives established by governmental bodies to control activities within various industries and society for the protection and welfare of the public.