Help Yourself, a Not-For-Profit Organization, Has a 5% Economic Interest

question 6

Multiple Choice

Help Yourself, a not-for-profit organization, has a 5% economic interest in the Furnishing Bank, another not-for-profit organization. The organizations operate independently, have no directors in common, and have no transactions with each other. For financial reporting purposes, how should Help Yourself account for its interest in the Furnishing Bank?

• A)Consolidation
• B)The equity method
• C)The cost method
• D)Note disclosure only

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Definitions:

Normal Balance

An account balance on the side where an increase in the account is recorded.

Ledger

A record that consolidates all transactions related to a particular account, facilitating the preparation of financial statements.

Analyzed

The process of examining data or a financial statement in detail to extract insights or identify trends.