Under the Initial Value Method, the Parent Recognizes Income When

question 96

Multiple Choice

Under the initial value method, the parent recognizes income when

• A) Dividends are received from the investee.
• B) Dividends are declared by the investee.
• C) The related expense has been incurred.
• D) The related contract is signed by the subsidiary.
• E) It is earned by the subsidiary.

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Definitions:

Trial Basis

A provisional period during which a product, service, or employee is tested or used before making a final decision regarding adoption, employment, or purchase.

Net 30

A payment term indicating that the full payment is due 30 days after the invoice date.

Payment Invoice

A document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided to the buyer.

Microsoft Excel

A spreadsheet application developed by Microsoft that allows users to organize, format, and calculate data with formulas using a system of rows and columns.