Where Are Decisions Made

question 57

Multiple Choice

Where are decisions made?

• A)IC headquarters.
• B)subsidiary headquarters.
• C)cooperatively by IC and subsidiary.
• D)IC headquarters,subsidiary headquarters,and sometimes cooperatively by IC and subsidiaries.
• E)Virtual corporations Decisions are made in IC headquarters,subsidiary headquarters,and sometimes cooperatively by IC and subsidiaries.

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Definitions:

Accounting for Business Combinations

The process of accounting for the acquisition of one company by another and combining the financial statements.

Acquisition Method

An accounting technique used in consolidating the financial statements of a group involving a parent and its subsidiaries, recognizing and measuring the assets acquired and liabilities assumed at their fair value on the acquisition date.

Purchase Method

An accounting method used in mergers and acquisitions where the purchasing company records the assets and liabilities of the acquired company at fair market value.

Consolidated Balance Sheet

A financial statement that shows the aggregated financial position of a parent company and its subsidiaries.