Which of the following is true about purchase accounting?

A) Cash and accounts receivable, reduced for bad debt and returns, are valued at their values on the books of the target before the acquisition..
B) Marketable securities are valued at their realizable value after transactions costs.
C) Property, plant and equipment are valued at fair market value.
D) Intangible assets are booked at their appraised values.
E) All of the above.

Question

Which of the following is true about purchase accounting?

A) Cash and accounts receivable, reduced for bad debt and returns, are valued at their values on the books of the target before the acquisition..
B) Marketable securities are valued at their realizable value after transactions costs.
C) Property, plant and equipment are valued at fair market value.
D) Intangible assets are booked at their appraised values.
E) All of the above.

Quizplus · Accepted Answer

Purchase accounting involves recording the assets and liabilities of a company being acquired at their fair market values at the time of acquisition. This includes cash and accounts receivable (adjusted for bad debts and returns), marketable securities (valued at realizable value after transaction costs), property, plant, and equipment (valued at fair market value), and intangible assets (booked at appraised values).

Which of the Following Is True About Purchase Accounting