Which of the Following Criteria Is Applicable with Respect to Determining

question 81

Multiple Choice

Which of the following criteria is applicable with respect to determining when a variable interest entity (VIE) must be consolidated into the sponsoring firm's financial statements?

• A)A consolidation must occur if the firm has a controlling financial interest and is the VIE's primary beneficiary.
• B)A consolidation must occur if the firm is entitled to receive all of the VIE's residual returns.
• C)A consolidation must occur regardless of the risk of loss exposure.
• D)A consolidation must occur if the sponsoring firm owns more than 50% of the VIE's equity.

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Definitions:

Cluster Sampling

A probability sampling method in which the population is first divided into clusters and then a simple random sample of the clusters is taken.

Simple Random Sampling

A sampling method where each member of the population has an equal chance of being selected, ensuring unbiased representation.

Stratified Simple Random Sampling

A sampling method that divides a population into smaller groups or strata and then selects random samples from each stratum.

Convenience Sampling

A nonprobability method of sampling whereby elements are selected for the sample on the basis of convenience.