A Company Owning a Majority (But Less Than 100%) of Another

question 7

Multiple Choice

A company owning a majority (but less than 100%) of another company's voting shares on the date of acquisition should account for its subsidiary (in its consolidated balance sheet) :

• A) by including only its share of the fair market values of the subsidiary's net assets.
• B) by including only its share of the book values of the subsidiary's net assets.
• C) by including 100% of the fair market values of the subsidiary's net assets.
• D)by including 100% of the fair market values of the subsidiary's net assets and accounting for any unowned portion of the subsidiary's voting shares using the non-controlling interest (NCI) account.

Understand the importance of conciseness and reader-centeredness in business communication.

Identify and differentiate between effective and ineffective features of business communication.

Recognize the role of cultural sensitivity and clear language when communicating with non-English speakers.

Appreciate the value of excellent writing and communication skills in professional careers.

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Definitions:

Transactions

Financial events that affect the assets, liabilities, or equity of a company and can be measured in monetary terms.

Journal

A record where all financial transactions are entered initially, before being posted to individual accounts in the ledger, following the double-entry bookkeeping.

Chronologically

In the sequence of time, where events or records are arranged in the order of their occurrence.

Journal Entry

A journal entry is a record in accounting that logs all the financial transactions of a business, capturing their effects on the accounts.