Which of the Following Statements Regarding Losses Recorded by the Associate

question 46

Multiple Choice

Which of the following statements regarding losses recorded by the associate or joint venture is FALSE?

• A)The entity's share of losses of an associate or joint venture is recognized but only to the point where the carrying amount of the investment in the associate or joint venture is zero.
• B)The share of losses may be offset against other investments the entity has in the associate or joint venture such as long-term receivables.
• C)If, after reporting losses, an associate earns a profit, the entity recognizes a share of profits only after the share of profits exceeds the share of past losses not recognized.
• D)If, after reporting losses, a joint venture earns a profit, the entity does not recognize a share of profits ever.

Recognize the role of transaction costs and taxes in dividend policies and their effects on shareholder value.

Understand the role of the board of directors in dividend policy decisions and the legal framework governing dividends.

Identify the reasons behind stock repurchases and their effects compared to dividend payments.

Assess the relevance of dividends as a basis for the value of stocks.

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Definitions:

Capacity

The maximum amount that something can contain or accomplish, such as production capability within a given period.

Aggregate Plan

A production planning method that aims to establish overall output levels and inventory policies over a medium-term horizon to meet forecasted demand.

Master Production Schedule

A detailed plan that outlines when and how much of each product needs to be produced over a certain period to meet forecasted sales demand.

Aggregate Plan

A plan that translates annual business and marketing plans into a production plan to ensure inventory and resources are available to meet customer demand.