_____ Under purchase accounting, which of the following items must occur:
A) Common stock must be acquired.
B) A parent-subsidiary relationship must be established.
C) Cash must be the consideration given.
D) Common stock must be issued as consideration.
E) None of the above items must occur.

Question

Quizplus · Accepted Answer

Under purchase accounting, the specific form of consideration (whether cash, common stock, or otherwise) is not mandated, nor is the issuance of common stock or the establishment of a parent-subsidiary relationship specifically required. The focus is on recording the acquired assets and liabilities at their fair values.

_____ Under Purchase Accounting, Which of the Following Items Must