Ben, Inc Follows U

question 71

Multiple Choice

Ben, Inc. follows U.S. GAAP for its external financial reporting. Ben, Inc. owns 25% of the outstanding stock of Black, Inc. and accordingly uses the equity method to account for its investment. Which of the following is true regarding Ben, Inc.'s policies related to Black, Inc.?

• A) Ben, Inc. will increase the investment account for its pro-rata share of Black, Inc.'s net loss for the year.
• B) Ben, Inc. will increase the investment account for its pro-rata share of the dividends paid out by Black, Inc. for the year.
• C) Ben, Inc. will conform the accounting policies of Black, Inc. to its own accounting policies.
• D) None of these is true regarding how Ben, Inc. accounts for its investment in Black, Inc.

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Definitions:

Extra Charge

A fee added on top of a standard rate or price, often for additional services, special requests, or exceeding a predetermined limit.

Total Charge

Total charge typically refers to the complete amount of fees, costs, or expenses that a customer is required to pay for a particular service or product.

Nonfinancial Rewards

Incentives other than money, such as recognition, training, or work-life balance improvements, offered to employees.

Personal Selling Process

A series of steps that a salesperson follows to engage potential buyers, understand their needs, make a sales presentation, address objections, and close the sale.