Which One of the Following Potential Audit Problems Is Not

question 61

Multiple Choice

Which one of the following potential audit problems is not true in affecting goodwill impairment valuations?

• A)Goodwill arising from acquisitions can be netted into one test at the operating segment level,but not netted at the company level.
• B)Market valuation may be volatile.A material temporary decline in market value may not be a good indicator of FMV.
• C)FMV might not exist,might require independent appraisals by investment bankers or estimates using cash flow and discounted present value factors.
• D)No assumptions are required about competition,economic development,product placement,and so forth.

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Definitions:

Collusively

In a manner where firms in an industry work together secretly to set prices or otherwise manipulate market conditions to their advantage.

ATC Schedule

A tabulation of average total costs at different levels of output, showing how costs vary with changes in output.

Demand Schedule

A demand schedule is a table that shows the quantity of goods or services demanded at different price levels.

TR

Total Revenue, which is the total income generated from the sale of goods or services.