Which of the Following Statements About the Modified Equity Method

question 23

Multiple Choice

Which of the following statements about the modified equity method is FALSE?

• A)When a government reports on a GBE, it does so applying the modified equity method.
• B)Under the modified equity method, financial position and operating results are presented as they are using equity method.
• C)When a GBE reports other comprehensive income, it is reported on a single line on the statement of remeasurement gains and losses.
• D)Under the modified equity method, adjustments are made to conform the financial position or operating results of the GBE to the accounting principles followed by the government.

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Definitions:

Long-Run Average Total Cost

The average cost per unit of output where all inputs are considered variable, calculated over a period where firms can adjust all factors of production.

Short-Run Marginal Cost

The cost incurred by producing one additional unit of a product or service in the short run, where some factors are fixed.

Government Regulations

Laws and rules established by governmental agencies to control or modify economic behavior, protect consumers, or preserve natural resources.

Resource Prices

The cost of inputs used in the production of goods or services, such as raw materials, labor, and energy.