Which of the Following Sequence of Events Follows a Decrease

question 79

Multiple Choice

Which of the following sequence of events follows a decrease in the discount rate?

• A) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↑
• B) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓
• C) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑
• D) r↑ ⇒ I↑ ⇒ AE↑ ⇒ Y↑

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Definitions:

Consolidated Net Income

The total net income attributed to the parent company and its subsidiaries, after eliminating intercompany transactions and non-controlling interests.

Fair Value Adjustment

An accounting process of updating the reported value of an asset or liability to reflect its current market value.

Consolidated Financial Statements

Financial reports that combine the financial results of a parent company and its subsidiaries into a single statement, showing the overall financial health of the group.

Inventory

Assets held for sale in the ordinary course of business, or materials and supplies that are used in the production process to manufacture goods.