Sya Ltd Acquired All the Assets and Liabilities of Littman Ltd

question 38

Multiple Choice

Sya Ltd. acquired all the assets and liabilities of Littman Ltd. by issuing common shares to Littman. After this transaction, Littman owned 30% of Sya's outstanding shares. Which of the following statements is true?

• A)Littman is now a subsidiary of Sya.
• B)This is an intercorporate investment for Sya.
• C)Sya does not need to prepare consolidated financial statements.
• D)Sya should use the equity method to reflect its investment in Littman.

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Definitions:

Self-serving Bias

A common cognitive bias that causes individuals to perceive situations and interpret information in a way that benefits them or supports their pre-existing beliefs or interests.

Secure Self-esteem

A stable and positive evaluation of oneself, characterized by confidence and a sense of security in one's worth and abilities, regardless of external validation.

Free Association

A psychoanalytic technique where the patient speaks freely to uncover repressed thoughts and feelings.

Better-than-average Effect

A cognitive bias where individuals overestimate their own qualities and abilities relative to others.