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    Vbook - Pub Business Combination Quiz

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    Rialee
    1. The document contains a business combination quiz with 20 true/false questions covering various concepts in accounting for business combinations such as the definition of acquirer, acquisition method, acquisition date, defensive tactics, and types of business combinations. 2. It tests knowledge on the key requirements of PFRS 3 relating to accounting for business combinations including defining the acquirer, measuring identifiable assets and liabilities at fair value, recognizing goodwill, and accounting for non-controlling interests. 3. The quiz distinguishes between different types of business combinations such as horizontal, vertical, and conglomerate combinations and evaluates knowledge on defensive tactics used by companies to prevent hostile takeovers such as poison pills, shark repellents

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    Vbook - Pub Business Combination Quiz

    Uploaded by

    Rialee
    81 views3 pages
    1. The document contains a business combination quiz with 20 true/false questions covering various concepts in accounting for business combinations such as the definition of acquirer, acquisition method, acquisition date, defensive tactics, and types of business combinations. 2. It tests knowledge on the key requirements of PFRS 3 relating to accounting for business combinations including defining the acquirer, measuring identifiable assets and liabilities at fair value, recognizing goodwill, and accounting for non-controlling interests. 3. The quiz distinguishes between different types of business combinations such as horizontal, vertical, and conglomerate combinations and evaluates knowledge on defensive tactics used by companies to prevent hostile takeovers such as poison pills, shark repellents

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    Vbook.pub Business Combination Quiz

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    1. The document contains a business combination quiz with 20 true/false questions covering various concepts in accounting for business combinations such as the definition of acquirer, acquisition method, acquisition date, defensive tactics, and types of business combinations. 2. It tests knowledge on the key requirements of PFRS 3 relating to accounting for business combinations including defining the acquirer, measuring identifiable assets and liabilities at fair value, recognizing goodwill, and accounting for non-controlling interests. 3. The quiz distinguishes between different types of business combinations such as horizontal, vertical, and conglomerate combinations and evaluates knowledge on defensive tactics used by companies to prevent hostile takeovers such as poison pills, shark repellents

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    81 views3 pages

    Vbook - Pub Business Combination Quiz

    Uploaded by

    Rialee
    1. The document contains a business combination quiz with 20 true/false questions covering various concepts in accounting for business combinations such as the definition of acquirer, acquisition method, acquisition date, defensive tactics, and types of business combinations. 2. It tests knowledge on the key requirements of PFRS 3 relating to accounting for business combinations including defining the acquirer, measuring identifiable assets and liabilities at fair value, recognizing goodwill, and accounting for non-controlling interests. 3. The quiz distinguishes between different types of business combinations such as horizontal, vertical, and conglomerate combinations and evaluates knowledge on defensive tactics used by companies to prevent hostile takeovers such as poison pills, shark repellents

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    BUSINESS COMBINATION QUIZ preferred stock to defer the acquisition of the

    THEORIES company.

    TRUE 1. The tender offer that is opposed by FALSE 12. When a retail clothing store purchases a
    the acquire management is called a competitor in another city, a vertical
    hostile bid. combination has occurred.

    TRUE 2. In an acquisition where the acquirer pays cash FALSE 13. PFRS 3 requires the use for the purchase
    for the acquire assets, the book value of the method in accounting for business
    acquirer increases. combination.

    TRUE 3. When two entities competing in the same FALSE 14. Entity A acquires all the identifiable assets
    industry combine, it is called a horizontal and assumes all the liabilities of Entity B for 100.
    integration. Entity B’s identifiable assets and liabilities have
    fair values of ₱200 and ₱120, respectively.
    TRUE 4. One way that a horizontal business
    Entity A is renting out a license to Entity B under
    combination can increase sales for an entity is
    an operating lease. The terms of the lease
    to expand into new product markets.
    compared with market terms are favorable. The
    TRUE 5. A vertical combination is one where the fair value of differential is ₱5. The goodwill is
    entities have a potential buyer –seller ₱25.
    relationship.
    FALSE 15. Horizontal business combinations are likely
    TRUE 6. Conglomerate combinations are easy for the to occur when management is attempting to
    government to challenge in court. dominate a geographic segment of the market.

    TRUE 7. A vertical business combination generally FALSE 16. Noncontrolling interest are measured at
    involves companies attempting to improve the fair value only
    efficiency of operations by purchasing suppliers
    FALSE 17. Entity A acquires all the identifiable assets
    of inputs or purchases of outputs.
    and assumes all the liabilities of Entity B for 100.
    TRUE 8. The acquisition date in a business Entity B’s identifiable assets and liabilities have
    combination is normally closing the date. fair values of ₱200 and ₱120, respectively.
    Entity A incurred legal fees of ₱20 in negotiating
    TRUE 9. Entity A acquires all the identifiable assets the business combination. The goodwill is ₱40.
    and assumes all the liabilities of Entity B for 100.
    Entity B’s identifiable assets and liabilities have FALSE 18. The entity that obtains control in business
    fair values of ₱200 and ₱120, respectively. combination is called the acquiree.
    Entity A estimates liquidation costs of ₱10 in
    FALSE 19. The two important elements in the
    exiting the business activities of Entity B. The
    definition of business combination under PFRS
    goodwill is 20.
    3 are “business and combination”.
    TRUE 10. If negotiation between management groups
    FALSE 20. The only way to attain control over the net
    leads to a mutually agreeable business
    assets of another entity is to purchase the net
    combination, the process is called a friendly
    assets.
    takeover.

    TRUE 11. A poison pill is the term used to describe


    the issuance of a special kind of convertible
    MCQ

    1. This distinguishes a business combination from other types of investment transactions.

    Response: Obtaining of control

    2. Company A marks a hostile takeover bid for control of company B. In response, Company B makes a counter-offer to
    purchase shares from Company A’s shareholders. Which of the following best describes Company’s B response?

    Response: Pac-man defense

    3. Entity A and Entity B combined their business. The acquirer in the business combination is not clearly identifiable.
    Which of the following is not an indicator that Entity A is the acquirer?

    Response: Entity C, a new entity, is formed and Entity c transfers cash to Entity A and Entity B

    4. PFRS 3 requires all business combinations to be accounted for using the

    Response: Acquisition Method

    5. Company A has made an offer to purchase all of the outstanding shares of Company B for ₱10 per share (the current
    market value of the shares). In response to Company’s A offer, the shareholders of Company B were given rights to
    purchase additional shares at ₱8 per share. Which of the following tactics was employed by Company B to prevent
    Company A from acquiring control of Company B.

    Response: Poison Pill

    6. Able Ltd. Offers to buy shares from the existing shareholders of Wei Co. at a premium price. The current management
    and board of directors of Wei have let Wei shareholders know that they do not approve of this. This is an example of
    a (n).

    Response: Hostile Takeover

    7. Which of the following statements is incorrect regarding the consideration transferred in a business.

    Response: It includes those that are retained in the combined entity.

    8. According to PFRS 3, the acquisition date is normally the

    Response: Closing Date

    9. The defensive maneuver where a company bus stock from a potential acquirer at a premium over the market price is
    called which of the following?

    Response: Shark repellant

    10. The entity that obtains control over another business in the business combination is called the

    Response: Acquirer
    PROBLEM SOLVING

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