Tree Corporation Can Influence the Decisions of Root Ltd

question 6

Multiple Choice

Tree Corporation can influence the decisions of Root Ltd.but Root is not a subsidiary of Tree Corporation.What method of accounting must Tree Corporation use for Root Ltd.?

• A)Consolidation method
• B)Equity method
• C)Cost method
• D)Fair value method

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Definitions:

Treasury Stock

Stock that a corporation has once issued and then reacquires.

Cash Dividends

Payments made by a corporation to its shareholders from its profits or reserves, usually in the form of cash.

Noncash Investing

Investment activities that do not involve cash transactions, often including the acquisition of physical assets, securities, or other investments through non-cash exchanges.

Treasury Stock

Refers to shares that were once outstanding but have been repurchased by the corporation and are held in its own treasury.