Questions from Financial Accounting


Q: Why did companies such as Enron find the use of special

Why did companies such as Enron find the use of special-purpose entities to be advantageous?

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Q: Describe each of the three legal forms that a business combination might

Describe each of the three legal forms that a business combination might take.

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Q: How is the amount reported as goodwill determined under the acquisition method

How is the amount reported as goodwill determined under the acquisition method?

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Q: What impact does the level of ownership have on the amount of

What impact does the level of ownership have on the amount of goodwill reported under the acquisition method?

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Q: When a business combination occurs after the beginning of the year,

When a business combination occurs after the beginning of the year, the income earned by the acquired company between the beginning of the year and the date of combination is excluded from the net inc...

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Q: What is the maximum balance in retained earnings that can be reported

What is the maximum balance in retained earnings that can be reported by the combined entity immediately following a business combination?

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Q: How is the amount of additional paid-in capital determined when

How is the amount of additional paid-in capital determined when recording a business combination?

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Q: Arthur Levitt’s speech, “The Numbers Game,” is available on

Arthur Levitt’s speech, “The Numbers Game,” is available on the SEC’s website at www.sec.gov/ news/speech/speecharchive/1998/spch220.txt . Read the speech, and then answer the following questions. a....

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Q: Which of the costs incurred in completing a business combination are

Which of the costs incurred in completing a business combination are capitalized under the acquisition method?

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Q: When does a noncontrolling interest arise in a business combination?

When does a noncontrolling interest arise in a business combination?

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