Under the purchase accounting method

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Reference no: EM132014410

1. Under the purchase accounting method,

A. goodwill must be amortized straight-line over the target firm's estimated life.

B. acquired assets are recorded based on their target firms' book values.

C. goodwill always remains on the acquirer's books at its original value.

D. goodwill will generally be a long-term liability on the acquirer's books.

E. acquired assets are recorded at fair market value.

2. Which one of the following is a source of cash?

A. An increase in inventory

B. An increase in fixed assets

C. A decrease in long-term debt

D. The payment of a cash dividend

E. A decrease in accounts receivable

Reference no: EM132014410

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