_____ In purchase accounting, whether to continue with the old basis of accounting or use the new basis of accounting depends on whether
A) Common stock was acquired.
B) Assets were acquired.
C) The target company's assets are undervalued (in total).
D) Whether a statutory merger occurs.
E) None of the above.

Question

Quizplus · Accepted Answer

In purchase accounting, the decision to continue with the old basis of accounting or use a new basis is not dependent on any of the options listed. Instead, it involves recording the assets and liabilities of the acquired company at their fair market values at the time of acquisition, regardless of the specifics of the transaction structure.

_____ in Purchase Accounting, Whether to Continue with the Old