Under ARB 51, "Controlling Financial Interest" Is

question 9

Multiple Choice

Under ARB 51, "controlling financial interest" is:

• A)criterion for consolidation purposes.
• B)defined as 50% ownership of another entity's voting shares.
• C)the ability to make decisions about another entity's activities indirectly.
• D)the right to contribute to the expected residual returns of another entity as they occur.

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Definitions:

Cumulative Surplus

The total accumulated amount of profits, after all expenses and dividends are paid, that a company has at its disposal for reinvestment or distribution.

Minimum Cash Balance

The smallest amount of cash that a company seeks to maintain in its accounts to ensure financial stability and operational efficiency.

Accounts Receivable Balance

The total amount of money owed to a company by its customers for goods or services provided on credit, yet to be paid.

Accounts Receivable Period

The average number of days it takes for a business to collect payments owed by its customers.