Which Statement Is Not Correct About "Associates

question 124

Multiple Choice

Which statement is not correct about "associates"?

• A)Holding 18% of the voting power of the investee may mean significant influence exists.
• B)The ability to exercise significant influence over the investee mitigates moral hazard.
• C)The ability to exercise significant influence over the investee mitigates adverse selection.
• D)Significant influence is presumed if 51% of the voting power of the investee is held.

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Definitions:

First-In, First-Out

An inventory valuation method where goods produced or acquired first are sold or disposed of before newer inventory, reflecting the actual flow of goods.

Process Costing

A method of costing used in manufacturing where costs are assigned to batches or production runs, typically for similar products.

Equivalent Units

A concept used in cost accounting to convert partial units of production into a number of fully completed units.

Materials

Materials or ingredients utilized in the creation or fabrication of products.