Match the Following Terms to Their Correct Definition

question 44

Multiple Choice

Match the following terms to their correct definition:
-any transaction or set of transactions that brings together two or more previously separate entities to form a single accounting entity

• A)equity security
• B)debt security
• C)passive
• D)significant influence
• E)control
• F)parent
• G)subsidiary
• H)goodwill
• I)business combination
• J)minority interest
• K)fair value method
• L)unrealized gains and losses
• M)equity method
• N)consolidation worksheet

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Definitions:

Dividends

Payments made by a corporation to its shareholders from the company's profits or reserves.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, representing the owners' share in the corporation.

Balance Sheet

A financial statement that outlines a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Additional Paid-in Capital

Additional paid-in capital is the amount of money shareholders have invested in the company above the par value of the shares, representing excess capital that is not classified as profit.