Combination accounted for as an acquisition

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Reference no: EM131214657

One company acquires another company in a combination accounted for as an acquisition. The acquiring company decides to apply the equity method in accounting for the combination. What is one reason the acquiring company might have made this decision?

A. It is the only internal reporting method allowed by generally accepted accounting principles

B. Management periodically measures each subsidiary’s profitability on a monthly or quarterly basis

C. When the equity method is used, no worksheet entries are required in the consolidation process

D. It is relatively easy to apply

Reference no: EM131214657

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