Which of the Following Statements Is True of a Line

question 139

Multiple Choice

Which of the following statements is true of a line organization?

• A) It results in slow decision making because of a complex chain of command.
• B) It has specialists to provide advice or support for line managers.
• C) It breeds incompetence in small businesses.
• D) It eliminates confusion about who is responsible for what.

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Definitions:

One-Line Method

An accounting technique used in the consolidation of financial statements where a parent company reports the net assets and results of a subsidiary in a single line.

Joint Venture Liabilities

The financial obligations that are incurred jointly by partners in a venture, which must be settled together.

Line-by-Line Method

A consolidation technique where the parent company combines its subsidiary's assets, liabilities, income, and expenses line by line into its own financial statements.

One-Line Method

An accounting technique used for combining the financial statement of a parent company and its subsidiary by reporting the investment in a single line.