{"id":47622,"date":"2024-04-15T22:29:26","date_gmt":"2024-04-15T22:29:26","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=47622"},"modified":"2024-04-15T22:29:26","modified_gmt":"2024-04-15T22:29:26","slug":"under-the-purchase-method-of-accounting-the-transferee-company-incorporates-in-its-books","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/under-the-purchase-method-of-accounting-the-transferee-company-incorporates-in-its-books\/","title":{"rendered":"Under the &#8216;purchase method of accounting&#8217;, the transferee company incorporates in its books"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a973bd0705f3\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    The assets, liabilities and reserves of the transferor company                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    The assets, liabilities and not statutory reserves of the transferor company                <\/div>\r\n                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    The assets and liabilities of the transferor company                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> correct answer is: <strong>D. The assets and liabilities of the transferor company<\/strong>.<\/p>\n<p>Under the purchase method of accounting, the transferee company incorporates in its books the assets and liabilities of the transferor company at their fair values on the date of acquisition. The purchase price is allocated to the assets and liabilities acquired based on their fair values. Any difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill.<\/p>\n<p>Option A is incorrect because it includes reserves. Reserves are not assets or liabilities, but rather are adjustments to equity.<\/p>\n<p>Option B is incorrect because it excludes statutory reserves. Statutory reserves are a type of reserve that is required by law to be maintained by a company.<\/p>\n<p>Option C is incorrect because it includes both assets and liabilities, as well as reserves. Reserves are not assets or liabilities, but rather are adjustments to equity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Under the &#039;purchase method of accounting&#039;, the transferee company incorporates in its books<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/under-the-purchase-method-of-accounting-the-transferee-company-incorporates-in-its-books\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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