In Reference to Intercompany Transactions Between an Investor and an Investee,when

question 41

Multiple Choice

In reference to intercompany transactions between an investor and an investee,when the investor can significantly influence the investee,which of the following statements is correct,assuming that the investor is using the equity method?

• A)There is the presumption of arms-length bargaining between the related parties.
• B)As long as the investor recognizes the effects of the transaction in its financial statements,it is not required to provide any additional disclosures.
• C)In reporting its share of earnings and losses of an investee,the investor must eliminate the effect of profits and losses on the intercompany transactions until they are realized.
• D)None of the above is correct.

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Definitions:

Pathogenic Organisms

Microorganisms that cause disease in their host, including viruses, bacteria, fungi, and parasites.

Microbiologic Tests

Laboratory tests conducted to identify or quantify microorganisms, such as bacteria and viruses, in samples.

Hematologic Tests

Medical examinations of blood to diagnose diseases related to blood cells and clotting functions.

Optical Microscope

A microscope that uses light, concentrated through a condenser and focused through the object being examined, to project an image.