A Subsidiary

question 20

Multiple Choice

A subsidiary:

• A) is excluded from consolidation because the investor is a venture capital organisation.
• B) is not excluded from consolidation simply because the investor is a venture capital organisation.
• C) is excluded from consolidation because its business activities are dissimilar from those of other entities within the group.
• D) is not excluded from consolidation simply because the investor only has significant influence, and not control, over it.

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Definitions:

Cost of Goods Sold

Costs directly associated with manufacturing goods a company sells, such as materials and labor expenses.

Accounts Receivable Balance

The Accounts Receivable Balance is the total amount of money owed to a company by its customers for goods or services delivered on credit.

Month of Sale

The specific month in which a transaction or sale of goods or services took place.

Accounts Receivable Period

The average number of days it takes for a business to collect payments from its credit sales, indicating the efficiency of its credit and collection policies.