If a Company Acquires a 40% Common Share Interest in Another

question 271

Multiple Choice

If a company acquires a 40% common share interest in another company,

• A) the equity method is usually applicable.
• B) all influence is classified as controlling.
• C) the cost method is always applicable.
• D) the ability to exert significant influence over the activities of the investee does not exist.

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Definitions:

Distinct

Clearly different or distinguishable in nature, significance, or characteristics.

Data and Information

Data refers to raw, unprocessed facts, while information is data that has been processed in a way that is meaningful to the user.

IT Security

The practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks and unauthorized access.

Organization

An arranged group of people with a particular purpose, such as a business, government department, charity, or club.