Chapter 1 Intercorporate Acquisitions and Investments in Other Entities Multiple Choice Questions 1. Assuming no impairment in value prior to transfer, assets transferred by a parent company to another entity it has created should be recorded by the newly created entity at the assets': A. cost to the parent company. B. book value on the parent company's books at the date of transfer. C. fair value at the date of transfer. D. fair value of consideration exchanged by the newly created entity. Answer: B Learning Objective: 01-01 Learning Objective: 01-04 Topic: Internal Expansion: Creating a Business Entity Topic: Valuation of Business Entities Blooms: Remember AACSB: Reflective Thinking AICPA: FN Decision Making Difficulty: 1 Easy 2. Given the increased development of complex business structures, which of the following regulators is responsible for the continued usefulness of accounting reports? A. Securities and Exchange Commission (SEC) B. Public Company Accounting Oversight Board (PCAOB) C. Financial Accounting Standards Board (FASB) D. All of the above Answer: D Learning Objective: 01-01 Topic: An Introduction to Complex Business Structures Blooms: Remember AACASB: Reflective Thinking AICPA: FN Reporting Difficulty: 1 Easy