Match the Following Terms to Their Correct Definition

question 38

Multiple Choice

Match the following terms to their correct definition:
-situation where the investor owns more than 50% of the outstanding common shares and is therefore deemed to own the investee

• 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:

Conceptual Framework

An underlying structure in accounting that outlines the objectives and fundamentals leading to consistent standards and financial reporting.

Qualitative Characteristic

A fundamental attribute that makes the information provided in financial statements useful to users.

Going Concern

An accounting principle that assumes a company will continue in operational existence for the foreseeable future, without the intention or necessity of liquidation.