Which of the Following Is the Primary Justification for Reporting

question 15

Multiple Choice

Which of the following is the primary justification for reporting the acquisition of a controlling interest on a consolidated basis?

• A) The companies are legally and in economic substance separate.
• B) The companies are legally and in economic substance one entity.
• C) The companies are legally one entity but they are separate in economic substance.
• D) The companies are legally separate but they are one entity in economic substance.

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Definitions:

Revenue

The total amount of money received by a company or government from its activities, such as sales of goods and services, before any expenses are subtracted.

Profit

Profit is the financial return or gain achieved from an investment or business venture after subtracting all expenses and costs.

Equilibrium Price

The price at which the quantity of a good or service supplied matches the quantity demanded, leading to market balance.

Competitive Price-Taker

A firm or individual that has no influence over the market price and must accept the prevailing market price for its product or input.