Question 2
An intercompany transaction is a transaction between
Question 3
Minority, passive investments are initially recorded at the
Question 4
To avoid double counting P's investment in S, P must eliminate
Question 5
For which type of investments would unrealized increases and
decreases be recorded directly in an owners' equity account?
Question 6
Intercompany sales
Question 7
U.S. GAAP and IFRS require firms to account for minority, active
investments, using the _____ method.
Question 8
U.S. GAAP view investments of between 20 and 50 percent of the
voting stock of another company (unless evidence indicates that
significant influence cannot be exercised) as
Question 9
Consolidated financial statements are typically prepared when one
company has
Question 10
U.S. GAAP view investments of less than 20 percent of the voting stock
of another company as
Question 11
U.S. GAAP and IFRS require firms to account for business
combinations using the _____ method.
Question 12
When an investor owns less than a majority of the voting stock of
another corporation, the accountant must judge when the investor can
exert significant influence. For the sake of uniformity, U.S. GAAP and
IFRS presume that significant influence exists at ownership of _____
or more of the voting stock of the investee. (Assume that management
does not have a contractual or other basis to demonstrate that
influence.)