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3 years ago

Multiple-Choice Questions on Consolidation Overview [AICPA Adapted]

Business

1 answer:

boyakko [2]3 years ago

4 0

Answer: 1. D. Economic entity

2. C. Circumstances prevent the exercise of control.

3. B. Consolidation used for both Sell and Vane.

4. B. In form, the companies are separate; in substance, they are one entity

Explanation:

1. When a parent–subsidiary relationship exists, it can be infered that consolidated financial statements will be prepared in recognition of the accounting concept of economic entity.

2. Consolidated financial statements are prepared when one company has a controlling interest in another unless the circumstances prevent the exercise of control.

3. Based on the information given, in Penn’s consolidated financial statements, it should be noted that Sell and Vane should be consolidated. Therefore, the correct option is B.

4. The best theoretical justification for consolidated financial statements is that in form, the companies are separate while in substance, they are regarded as one entity.

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Answer:

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The values in this case are

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$450 in year two

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4 years ago

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3 years ago

Read 2 more answers

If real GDP is $500 billion, full employment GDP is $300 billion, and the marginal propensity to consume is 0.9, then Congress s

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Answer:

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so correct option is 3. increase taxes by $22.22 billion.

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solution

we know here that Inflationary gap will be

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Inflationary gap = $(500 - 300) billion

Inflationary gap = $200 billion

and tax Multiplier is

Tax Multiplier = $\frac{- marginal propensity}{1 - 0.9}$

Tax Multiplier = -9

here negative sign means that decrease real GDP by $9

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3 years ago

Grassley Corporation allocates administrative costs on the basis of staff hours. Short-run monthly usage and anticipated long-ru

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Answer:

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3 years ago