1.

Transactions costs do not include

a. Fees and commissions paid to agents

b. Levies by regulatory agencies and securities exchanges
c. Transfer taxes and duties
d. Internal administrative costs

2. Transaction costs include

a. Fees and commissions paid employees acting as agents

b. Debt premiums or discounts
c. Financing costs
d. Internal administrative costs

3. An entity has retained control of a transferred asset if

a. The transferee has the practical ability to sell the transferred asset
b. The transferee does not have the practical ability to sell the transferred asset
c. The transferred asset is traded in an active market and the transferee could repurchase
the transferred asset in the market if it needs to return the asset to the entity
d. The transferee is unlikely to sell the transferred

4. When a company holds between 20% and 50% of the outstanding stock of an investee,
which of the following statement applies?

a. An investor should always use the equity method to account for its investment
b. The investor should use the equity method to account for its investment unless
circumstances indicate that it is unable to exercise “significant influence” over the
investee
c. The investor must use the fair value method unless it can clearly demonstrate the ability
to exercise “significant influence” over the investee
d. The investor should always use the fair value method to account for its investment