Answer: D) A subsidiary is an invisible part of a business combination and should be included in its entirety regardless of the degree of ownership.
What is a basic premise of the acquisition method regarding accounting for a non controlling interest?
A) Consolidated financial statements should not report a non controlling interest balance because these outside owners do not hold stock in the parent company.
B) Consolidated financial statements should be primarily for the benefit of the parent company's stockholders.
C) Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry.
D) A subsidiary is an invisible part of a business combination and should be included in its entirety regardless of the degree of ownership.
D) A subsidiary is an invisible part of a business combination and should be included in its entirety regardless of the degree of ownership.
Answer:
C) Total assets are overstated.
Explanation:
The journal Entry for the Depreciation is as follows:
Dr. Depreciation Expense xxx
Cr. Accumulated Depreciation xxx
By missing this Journal entry the Accumulated depreciation account will be understated as we know that this is a contra asset account and this will net off the Long term assets. So, as a result the total asset will be overstated.
A recent Harris poll reported that 82 to 91 percent of customers say that they will never return to a business after a negative customer service experience. The percentage of customers decision for never returning to a business due to a bad experience varies according to the industries. The range of the percentage is 82 to 91 percent.
Answer:
company's acid-test ratio is 1.63. Option e
Explanation:
Acid test ratio is similar to current ratio. However, current assets difficult to liquidate such as inventory are usually not included in the total current asset computation
Given,
Cash = $ 42,250
Short-term investments = 60,000
Accounts receivable, net = 79,500
Merchandise inventory = 115,000
Prepaid expenses = 9,700
Accounts payable = 111,400
Acid test = (42250 + 60000 + 79500 + 9700)/111400
= 181750/111400
= 1.63
Option e.
Investors and financial analysts wanting to evaluate the operating efficiency of a firm's managers would primarily look at the firm's asset utilization ratios.
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