If the Non-Controlling Interest at Acquisition Is Based on the Fair

question 18

Multiple Choice

If the non-controlling interest at acquisition is based on the fair value of the subsidiary's identifiable net assets, which consolidation theory is being applied?

• A) The proprietary theory.
• B) The parent company theory.
• C) The entity theory.
• D)The parent company extension theory.

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Definitions:

Flexible Budgeting

A budget that adjusts to changes in activity levels or other factors affecting costs, providing a more accurate comparison to actual results.

Unit Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor, calculated on a per unit basis.

Static Budget

A financial plan that does not change or adjust over the period, even when there are significant changes in the levels of activity.

Variable Costs

Expenses that change in proportion to the level of activity or production volume.