Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A)Under the purchase method,the company's net assets are recorded at the price paid for these assets on the date of acquisition.
• B)Under the acquisition method,the company's net assets are recorded at the price paid for these assets on the date of acquisition.
• C)As of January 1^st,2008,the Purchase method must be used to account for business combinations where an acquirer can be identified)
• D)The acquisition method is consistent with the historical cost principle while the purchase method is not.

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Definitions:

Federal Unemployment Taxes

Taxes imposed on employers to fund the federal government's oversight and support of state unemployment insurance programs.

Employer

An individual or organization that hires and pays for the services of employees in exchange for their labor.

General Journal Entry

A record in the accounting journal that represents a specific financial transaction, detailing the accounts affected and the amounts involved.

Payroll

The total amount of wages, salaries, bonuses, and deductions a business pays to its employees.