Match the Following Terms to Their Correct Definition

question 59

Multiple Choice

Match the following terms to their correct definition:
-method of accounting required for all passive investments in which the investment is valued at the price for which the investor could sell the asset in an orderly transaction between market participants

• 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:

Break-even Point

The level of production or sales at which total revenues equal total expenses.

Unit Sales

The quantity of products sold, typically measured on a per-unit basis.

Margin Of Safety

The difference between actual sales and the break-even point, indicating how much sales can fall before a business incurs a loss.

Net Operating Income

Earnings resulting from the standard operations of a business, without considering taxes and interest expenses.