Test Bank for Advanced Financial Accounting 13th Edition By Theodore Christensen
by Theodore E. Christensen (Author), David M. Cottrell (Author), Cassy Budd (Author)
Test Bank for Advanced Financial Accounting
a a a a a a
13th Edition
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By Theodore
c a c c c a
Christensen
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, Table Of Contents:
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1. Intercorporate Acquisitions and Investments in Other Entities
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2. Reporting Intercorporate Investments and Consolidation of Wholly Owned
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cSubsidiaries with No Differentialc c c
3. The Reporting Entity and the Consolidation of Less-Than-Wholly-Owned
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cSubsidiaries with NoDifferential c c
4. Consolidation of Wholly Owned Subsidiaries Acquired at More Than Book Value
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5. Consolidation of Less-Than-Wholly-Owned Subsidiaries Acquired at More ThanBook
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cValue
6. Intercompany Inventory Transactions c c
7. Intercompany Transfers of Services and Noncurrent Assets
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8. Intercompany Indebtedness c
9. Consolidation Ownership Issues c c
10. Additional Consolidation Reporting Issues
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11. Multinational Accounting: Foreign Currency Transactions and Financial
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cInstruments
12. Multinational Accounting: Issues in Financial Reporting and Translation of
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c ForeignEntity Statements
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13. Segment and Interim Reporting
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14. SEC Reportingc
15. Partnerships: Formation, Operation, and Changes in Membership
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16. Partnerships: Liquidation c
17. Governmental Entities: Introduction and General Fund Accounting c c c c c c
18. Governmental Entities: Special Funds and Governmentwide Financial Statements
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19. Not-for-Profit Entities c
20. Corporations in Financial Difficulty c c c
,TEST BANK FOR c c
Advanced Financial Accounting 13th Edition By Theodore Christensen c c c c c c c
Chapter 1 Intercorporate c cc c c Acquisitions and Investments in Other Entities c c c c c
1) Assuming no impairment in value prior to transfer, assets transferred by a parent company to
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another entity it has created should be recorded by the newly created entity at the assets':
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A) cost to the parent company.
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B) book value on the parent company's books at the date of transfer.
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C) fair value at the date of transfer.
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D) fair value of consideration exchanged by the newly created entity.
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Answer: B c
Difficulty: 1
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Easy
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Topic: Internal Expansion: Creating a Business Entity; Valuation of Business Entities
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Learning Objective: 01-01 Understand and explain the reasons for and different methods of
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business expansion, the types of organizational structures, and the types of acquisitions.;
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c01- 03 Make calculations and prepare journal entries for the creation of a business entity.
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Bloom's: Remember c
AACSB: Reflective
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Thinking AICPA: FN
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Decision Making
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2) Given the increased development of complex business structures, which of the
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followingregulators is responsible for the continued usefulness of accounting reports?
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A) Securities and Exchange Commission (SEC) c c c cc
B) Public Company Accounting Oversight Board (PCAOB)
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C) Financial Accounting Standards Board (FASB) c c c c
D) All of the other answers are correct
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Answer: D c
Difficulty: 1
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Easy
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Topic: An Introduction to Complex Business Structures c c c c c
Learning Objective: 01-01 Understand and explain the reasons for and different methods of
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business expansion, the types of organizational structures, and the types of acquisitions.
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Bloom's: Remember c
AACSB: Reflective
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Thinking AICPA: FN
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Reporting
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3) A business combination in which the acquired company's assets and liabilities are
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combinedwith those of the acquiring company into a single entity is defined as:
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A) Stock acquisition c
B) Leveraged buyout c
C) Statutory Merger c
D) Reverse statutory rollup c c
, Answer: C c
Difficulty: 1
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Easy
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Topic: Organizational Structure and Financial Reporting c c c c
Learning Objective: 01-04 Understand and explain the differences between different forms of
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business combinations.
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Bloom's: Remember c
AACSB: Reflective
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Thinking AICPA: FN
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Decision Making
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4) In which of the following situations do accounting standards not require that the financial
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statements of the parent and subsidiary be consolidated?
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A) A corporation creates a new 100 percent owned subsidiary
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B) A corporation purchases 90 percent of the voting stock of another company
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C) A corporation has both control and majority ownership of an unincorporated company
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D) A corporation owns less-than a controlling interest in an unincorporated company
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Answer: D c
Difficulty: 1
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Easy
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Topic: Organizational Structure and Financial Reporting c c c c
Learning Objective: 01-01 Understand and explain the reasons for and different methods of
c c c c c c c c c c c c
business expansion, the types of organizational structures, and the types of acquisitions.
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Bloom's: Remember c
AACSB: Reflective
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Thinking AICPA: FN
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Decision Making
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During its inception, Devon Company purchased land for $100,000 and a building for
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$180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created
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subsidiary, Regan Company, in exchange for 15,000 shares of Regan's $10 par value
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cstock.
Devon uses straight-line depreciation. Useful life for the building is 30 years, with zero
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residual value. An appraisal revealed that the building has a fair value of $200,000.
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5) Based on the information provided, at the time of the transfer, Regan Company should record:
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A) Building at $180,000 and no accumulated depreciation.
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B) Building at $162,000 and no accumulated depreciation.
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C) Building at $200,000 and accumulated depreciation of $24,000.
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D) Building at $180,000 and accumulated depreciation of $18,000.
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Answer: D c
Difficulty: 2
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Medium
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Topic: Valuation of Business Entities; Accounting for Internal Expansion: Creating c c c c c c c c
cBusinessEntities c
Learning Objective: 01-04 Understand and explain the differences between different
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cforms of business combinations.; 01-03 Make calculations and prepare journal entries for
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cthe creation of a business entity.
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Bloom's: Understand
AACSB: Analytical
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