The Noncontrolling Interest Line Item on the Income Statement Represents

question 13

Multiple Choice

The noncontrolling interest line item on the income statement represents ________.

• A) the portion of the subsidiary owned by others, which is deducted to determine net income
• B) the portion of the subsidiary owned by the reporting entity, which is added to determine net income
• C) the portion of earnings that belongs to others, which is deducted to determine net income attributable to the controlling interest
• D) the portion of earnings that belongs to others, which is added to determine net income attributable to the controlling interest

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Definitions:

Variable Production Costs

Costs that change in direct proportion to changes in the level of production, such as raw materials and hourly labor.

Fixed Production Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance, ensuring stability in production costs despite output variations.

Net Income

The total profit of a company after accounting for all costs and expenses, including taxes, interest, and depreciation.

Direct Materials

Raw materials that are directly traceable and allocable to a finished product in the manufacturing process.