Which Method of Accounting Will Generally Be Used When One

question 47

Multiple Choice

Which method of accounting will generally be used when one company purchases between 20% to 50% of the outstanding stock of another company?

• A)Only the fair value method may be used.
• B)Only the equity method may be used.
• C)The GAAP prescribed the equity method may be used.
• D)The GAAP prescribed the fair value method may be used.

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Definitions:

CFOs

Chief Financial Officers, senior executives responsible for managing the financial actions of a company.

Hard Numbers

refer to quantitative data or statistics that are concrete and verifiable, often used to support arguments or analysis.

Soft Benefits

Intangible advantages or perks associated with a job, product, or service that may improve satisfaction or wellbeing but are not quantifiable in financial terms.

Return Metrics

Refers to the analysis and measurement of the effectiveness of investments or actions, typically used in marketing and financial contexts to evaluate performance.