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:

Spending Variance

The difference between the actual spending and budgeted or expected spending, used to assess financial management and cost control.

Direct Materials

Materials that are directly traceable to the production of a specific product.

Tenant-Days

A measure used in the hospitality or rental sector representing the total number of days rented out to tenants.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular period.