Which of the following is a characteristic of the cost method of accounting for subsidiary operations? Select one:
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Which of the following is a characteristic of the cost method of accounting for subsidiary operations?
Parent company net income equals consolidated net income.
More working paper eliminations are required than for the equity method of accounting.
Consolidated amounts differ from the comparable amounts under the equity method of accounting.
None of the above
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- Which of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…List the types of intercompany revenue and expenses that are eliminated in the preparation of a consolidated income statement and indicate the effect that each elimination has on the amount of net income attribute to non-controlling interestUnder the cost method, dividends from the subsidiary to the parent Ⓡ a. are recognized in income when received. b. are recognized in income when declared. c. are recognized in income when paid. Od. do not affect income. Save Answer
- Which of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices a. Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an internal acquisitions department shall be recognized as expense in the Profit/Loss in the periods in which the costs are incurred. b. The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. c. The costs related to the organization of the newly formed corporation also known as pre-incorporation costs shall be capitalized as goodwill or deduction from…The following statements relate to analysis of expenses in the income statement based on either the nature ofexpenses or their function within the entity. Which statement is incorrect?I. An entity classifying expenses by function shall disclose additional information on the nature ifexpenses including depreciation, amortization expenses and employee benefit cost.II. PAS 1 requires the use of the cost of sales method because this presentation often provides morerelevant information to users than the nature of expense method. a. I onlyb. II onlyc. Both I and IId. Neither I nor IIWhich of the following statements is correct? Statement 1: Any unrealized profit or loss made by the subsidiary should be eliminated from its profit. Statement 2: only the group portion of any unrealized profit need to be eliminated.
- Which of the following accounting principles or conventions is contradictory to the GAAP requirement to expense R&D costs immediately? matching principle historical cost principle comparability conservatism1. Which statement is incorrect regarding presentation of statement of profit or loss and other comprehensive income?a. An entity may use the title 'statement of comprehensive income' instead of 'statement of profit or loss and other comprehensive income'.b. An entity may present the profit or loss section in a separate statement of profit or loss.c. If presented separately, the statement of profit or loss shall immediately precede the statementpresenting comprehensive income, which shallbegin with profit or loss.d. An entity may present a single statement of profit or loss and other comprehensive income, withprofit or loss and other comprehensive incomepresented in one section. 2. The statement of profit or loss and other comprehensive income shall presenta. Profit or lossb. Total other comprehensive incomec. Comprehensive income for the period, being the total of profit or loss…The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Cost
- Describe how, despite the fact they include different accounts, conceptually, the [C] entry under the equity method of pre-consolidation bookkeeping is the same as the [C] entry under the cost method of pre-consolidation bookkeeping.Please concisely explain how the excess investment cost over book value is allocated. When is the intra-entity’s profits recognized on transfers between the investor and investee? What is the controlling interest percentage for a consolidated accounting financial statement?Discuss the appropriate treatment in the income statement for the following items: a. Loss on discontinued operations. b. Non-controlling interest allocation.