Which of the Following Most Accurately Describes the Position Taken

question 31

Multiple Choice

Which of the following most accurately describes the position taken by current generally accepted accounting principles?

• A) Both pooling of interests and the purchase method are still permitted under certain circumstances.
• B) The valuation basis to be applied is the acquisition method under which the fair value of consideration transferred includes any contingent consideration,but excludes direct combination costs..
• C) The valuation basis to be applied is the cost method under which the valuation basis is the fair value of the assets and liabilities acquired including direct combination costs,but excluding contingent consideration.
• D) The purchase method requires a business acquisition transaction to be structured to meet twelve very specific criteria required by generally accepted accounting principles.

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Definitions:

Without Cutting

A manufacturing or shaping process that does not involve removing material, such as bending, casting, or forming.

General Contour

An outline that represents the shape or form of an object, especially used in design and drafting to indicate general shapes.

Front View

The principal view of an object in technical drawing, depicting the most characteristics of the design, typically facing the observer directly.

Purpose

The reason for which something is done or created or for which something exists.