If Jimmy Commits to Pledging $10,000 to Greystone College in 2008

question 6

Multiple Choice

If Jimmy commits to pledging $10,000 to Greystone College in 2008 and then pays in 2009, how much revenue will Greystone College recognize in 2008?.

• A) $10,000
• B) $0
• C) $9,000
• D) $7,000

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Definitions:

Variable Interest Entities (VIEs)

Entities in which an investor holds a controlling interest that is not based on a majority of voting rights, requiring special accounting treatment under financial reporting standards.

Voting Stock

Shares that give the shareholder the right to vote on important company decisions, essentially similar to voting common stock but may include different classes of stock.

Variable Interest Entities (VIEs)

A legal entity in which an investor holds a controlling interest that is not based on the majority of voting rights but rather on contractual or ownership arrangements.

Equity Ownership

The holding of shares in a company, giving the shareholder ownership rights and potentially entitlements to dividends and voting powers.