Which of the following statements is correct?
A) Under the purchase method, the company's net assets are recorded at the price paid for these assets on the date of acquisition.
B) Under the acquisition method, the company's net assets are recorded at the price paid for these assets on the date of acquisition.
C) As of January 1st, 2011, the Purchase method must be used to account for business combinations where an acquirer can be identified.
D) The acquisition method is consistent with the historical cost principle while the purchase method is not.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is correct?
A) Under the purchase method, the company's net assets are recorded at the price paid for these assets on the date of acquisition.
B) Under the acquisition method, the company's net assets are recorded at the price paid for these assets on the date of acquisition.
C) As of January 1st, 2011, the Purchase method must be used to account for business combinations where an acquirer can be identified.
D) The acquisition method is consistent with the historical cost principle while the purchase method is not.

Which of the Following Statements Is Correct