Which of the Following Is True About Passive Investments

question 82

Multiple Choice

Which of the following is true about passive investments?

• A)The investing company usually owns less than 20% of the voting stock in the investee and they are reported on the balance sheet at cost.
• B)These investments must not have any voting rights.
• C)The market value method requires realized gains and losses to be recognized on the income.
• D)The investing company must usually own less than 20% of the voting stock in the investee and these investments must be reported at market value on the balance sheet even though the historical cost principal is violated.

Construct and interpret a cash budget.

Understand the factors influencing a company's decision regarding short-term vs. long-term financing.

Calculate and analyze the cost of various types of short-term financing.

Describe the characteristics and implications of factoring accounts receivable.

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Definitions:

Competitive Advantage

The attribute that allows an organization to outperform its competitors, often through unique resources, capabilities, or positioning.

Transactional Activity

Transactional Activity refers to the routine, day-to-day operations and transactions within an organization, such as payroll processing and record-keeping.

Human Capital

The value of an individual’s competencies and capabilities, which is considered an asset to an organization’s performance and efficiency.

Human Resources Management

The strategic approach to the effective and efficient management of people in an organization to help their business gain a competitive advantage.