If an Investor Company Buys the Majority of the Voting

question 54

Multiple Choice

If an investor company buys the majority of the voting shares of an investee company what is the effect on the investee's accounting records?

• A)The assets and liabilities are re-valued to fair market value.
• B)The assets and liabilities are re-valued to the investor's cost.
• C)The transaction is recorded at the investee's historical cost.
• D)There is no effect on the investee's accounting records.

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Definitions:

PKU

Phenylketonuria (PKU) is a genetic disorder characterized by the inability of the body to break down the amino acid phenylalanine, leading to its accumulation and potential brain damage.

Sex Chromosome

A chromosome in the shape of a Y (male) or an X (female) that determines the sex of the child.

Klinefelter Syndrome

A chromosomal disorder found among males that is caused by an extra X sex chromosome and is characterized by infertility and mild intellectual disability.

Phenotype

The actual form, or constitution, of a person as determined by heredity and environmental factors.