_____ In purchase accounting in which cash is the consideration given, which of the following items cannot be added to the cost of the acquisition (or does not result in an increase thereto)?
A) Direct costs traceable to the acquisition.
B) Indirect costs not directly traceable to the acquisition.
C) Contingent consideration relating to other than securities prices.
D) The cost of having the target company's financial statements audited by a company's own auditing firm when the acquirer chooses not to rely on the audit report of the target company's auditor.
E) None of the above.

Question

Quizplus · Accepted Answer

Indirect costs not directly traceable to the acquisition cannot be added to the cost of the acquisition. Direct costs, contingent considerations, and specific audit costs can be included, but general overhead or indirect costs are not capitalized as part of the acquisition cost.

_____ in Purchase Accounting in Which Cash Is the Consideration