Company A acquires 40% of Company B in a stock-for-stock exchange. With respect to preparing financial statements, which of the following statements is correct?
A) Company A will most likely use pooling-of-interest accounting for consolidation purposes.
B) Company A will most likely use purchase accounting.
C) Company A will most likely use the cost method.
D) Company A will most likely use the equity method.
Correct Answer:
Verified
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