Company a Owns Shares of Company B and Company C

question 13

Multiple Choice

Company A owns shares of Company B and Company C.The statements of Company B are consolidated with those of Company A.The statements of Company C are not consolidated.Company A reports "Minority Interest" on its balance sheet.This account represents:

• A) A's minority share of the stock of B
• B) A's minority share of the stock of C
• C) the minority share by outside owners of the stock of A
• D) the minority share by outside owners of the stock of B
• E) the minority share by outside owners of the stock of C

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales.

Period Cost

Expenses not directly tied to production activity, such as administrative and selling expenses, that are expensed in the accounting period in which they are incurred.

Contribution Margin Ratio

A metric that shows the percentage of sales revenue left after variable costs are deducted, indicating how much contributes to fixed costs and profits.

Operating Income

Profits generated from a company's core business operations, excluding deductions of interest and taxes.