Chapter 1

Question 1

The acquirer recognizes all assets acquired and liabilities assumed in a business combination and measures them at their acquisition-date fair value

Answer 1

Acquisition Method

Question 2

A company acquires another company for less than their net identifiable assets

Answer 2

Bargain Purchase

Question 3

When an acquirer obtains control of one or more businesses

Answer 3

Business Combination

Question 4

Portray related companies as if they were actually a single company

Answer 4

Consolidated Financial Statements

Question 5

The ability to direct policies and management

Answer 5

Control

Question 6

The total difference at the acquisition date between the fair value of the consideration exchanged and the book value of the net identifiable assets acquired

Answer 6

Differential

Question 7

An asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized

Answer 7

Goodwill

Question 8

The acquired company is dissolved

Answer 8

Liquidated