An accounting method that requires the assets of the target ﬁrm to be reported at their fair market value on the books of the bidder is called the _______ method.
A) Purchase accounting.
B) Purchase reserve.
C) Pooling of interests.
D) Accounting reserve.
E) Goodwill accounting reserve.

Question

Quizplus · Accepted Answer

Purchase accounting is the method that requires the assets of the target firm to be reported at their fair market value on the books of the bidder. The other options, such as purchase reserve, pooling of interests, accounting reserve or goodwill accounting reserve, do not refer to this specific method of accounting.

An Accounting Method That Requires the Assets of the Target