Which of the Following Is not Correct with Respect

question 16

Multiple Choice

Which of the following is not correct with respect to acquisitions under the rules established by FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions?

• A) If the combination qualifies as an acquisition, the not-for-profit may acquire control of a business enterprise or other not-for-profit organization and will be accounted for using the acquisition method.
• B) Combinations not meeting the definition of a merger are reported as acquisitions.
• C) Assets and liabilities of the acquired entity are recorded at fair value on the books of the not-for-profit
• D) Entities that derive their revenues from business-like activities are required to expense the goodwill at the date of acquisition.

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Definitions:

Output Effect

The output effect describes how changes in price can affect the quantity of goods or services produced by firms, often related to the concepts of supply and demand.

Technological Improvement

Enhancements or advancements in technology that increase productivity, efficiency, or quality in the production of goods and services.

Marginal Product

The additional output that results from using one more unit of a production input, holding all other inputs constant.

Demand for Resource

The desire and ability of producers to employ resources in the production process, influenced by those resources' productivity and the market price of the final product.