Which of the Following Is Not a Factor That Indicates

question 91

Multiple Choice

Which of the following is not a factor that indicates a business enterprise that establishes a variable interest entity (VIE) should consolidate such VIE with its own financial statements?

• A) The business enterprise establishing a VIE has the obligation to absorb potentially significant losses of the VIE.
• B) The business enterprise establishing a VIE receives risks and rewards of the VIE in proportion to equity ownership.
• C) The business enterprise establishing a VIE has the right to receive potentially significant benefits of the VIE.
• D) The business enterprise establishing a VIE has power through voting rights to direct the entity's activities that significantly impact economic performance.
• E) The business enterprise establishing a VIE is a primary beneficiary for the VIE.

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Definitions:

Nonprofit Sector

A segment of an economy consisting of organizations that operate primarily to achieve social, cultural, or environmental objectives, without a primary focus on generating profits for owners or shareholders.

Social Innovation

The process of developing and implementing effective solutions to challenging and often systemic social and environmental issues in support of social progress.

Society's Limited Resources

The concept that resources such as time, money, and raw materials are finite and must be allocated wisely to meet the needs and wants of a society.

Entrepreneur

An individual who initiates, manages, and assumes the risks of a business venture in pursuit of profit and innovation.