If a Company Has Sales of $8 Million, Assets of $4

question 95

True/False

If a company has sales of $8 million, assets of $4 million and 60 employees, then it may be classified as a small proprietary company.

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Definitions:

Fair Value

The estimated market value of an asset or liability, based on current prices in an active market.

Acquisition Method

The acquisition method is an accounting technique used in consolidations to combine the financial statements of a parent company and its subsidiary, recognizing the acquired assets and liabilities at their fair values.

Consolidated Balance Sheet

A financial statement that summarizes the financial position of a parent company and its subsidiaries, presenting assets, liabilities, and equity as if the group were a single entity.

Total Consolidated Assets

The aggregated value of all assets owned by a company and its subsidiaries as reported on the consolidated balance sheet.