Which of the Following Is Not a True Statement About

question 94

Multiple Choice

Which of the following is not a true statement about the Allowance for Funds Used During Construction (AFUDC) ?

• A) AFUDC may have either a debt component or an equity component.
• B) The amount credited to AFUDC may exceed the amount of interest paid during the period on bonds issued for construction.
• C) AFUDC may be credited for an imputed amount of interest on the utility's own funds used for construction.
• D) AFUDC may include the total amount of borrowing during construction.

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Definitions:

Non-Controlling Interest

An ownership interest in a subsidiary held by investors other than the parent company, reflecting their share of the equity and earnings of the subsidiary.

Consolidation Adjustments

Modifications made to combine the financial statements of parent and subsidiary companies into a single set of statements.

Equity

The residual interest in the assets of the entity after deducting all its liabilities.

Pre-Acquisition Entry

An accounting entry made to adjust the values of the acquiree's assets and liabilities to their fair values at the acquisition date before they are consolidated.