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Eduardwww [97]
3 years ago
6

A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal

reporting purposes, the company has decided to apply the initial value method. Why might the company have made this decision?Consolidation is not required when the parent uses the initial value method.It is a relatively easy method to apply.GAAP now requires the use of this particular method for internal reporting purposes.Operating results appearing on the parent's financial records reflect consolidated totals.
Business
1 answer:
NemiM [27]3 years ago
7 0

Answer:

It is a relatively easy method to apply.

Explanation:

When accounting for a subsidiary, equity method is followed, whenever the shareholding percentage is equal or more than 20%.

But here, the parent company uses, initial value method for internal reporting.

Under initial value method the value of investment in subsidiary is recorded at cost, and then adjusted at year end at fair value, this clearly shows the gain or loss at each year end from such investment as per market norms.

There is no statutory requirement to follow such initial value method for internal reporting.

The correct reason therefore, is:

It is a relatively easy method to apply.

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An effective team would never have Unclear definitions of goals.

Option C is correct answer.

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4 0
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Why is it best to pay expenses for your business with a check, not with cash?
TEA [102]
Because you have proof of what you payed.
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3 years ago
Explain the difference between fixed and variable costs and give two examples of each. Can a company budget for variable costs?
galben [10]

Answer:

Fixed cost in an organization does not change and is fixed while the variable cost keep changing if the production is increased.

Explanation:

Fixed cost are said to be that cost which does not change with production level for a certain limit. Let us suppose there is no change in the rent amount if we have only factory for the production of goods.

But the variable cost are those cost which increases as production increases. More will be the variable cost when the production will be more. Also for per unit basis, the variable cost remains the same.

Fixed cost are not important in decision making if there is an excess of capacity available.

For example,

Direct labor, direct material -- variable cost

Salary of supervisor, rent of factory -- fixed cost

Even though there is not much change in the variable cost, like for suppose material price increases, a company can still make a budget that is based on the past experience and predicting the market prices. Similarly, if there is a machine that uses three units of direct material for a piece if finished product, which is not going to change in the future. Thus the company can make a budget.

5 0
3 years ago
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ikadub [295]

Answer:

d

Explanation:is wrong i got it wrong on edg

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B. Publisher Actions used in the macros must be on the page layout.

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