One of the Key Premises of Balance Theory Is That

question 38

True/False

One of the key premises of balance theory is that consistency in the triad (composed of observer, person, and object) is maintained when the multiplication of the signs in the sentiment and unit relations results in a negative value.

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Definitions:

Associate's Profit

The portion of profits attributable to a company's investment in an associate, typically accounted for using the equity method.

Equity Accounted Balance

A valuation method used in accounting for investments, where the investment is initially recognized at cost and subsequently adjusted for the investor’s share of the investee’s net assets changes, including profits and losses.

Profit/(Loss)

The financial result of a business's operations for a specific period, calculated as income minus expenses. If positive, it's a profit; if negative, a loss.

Equity Accounted Balance

A valuation method for the recognition of investments in associates, where the investment is initially recorded at cost and adjusted for the investor’s share of the net profit or loss of the investee.