Which of the Following Accurately Reflects the Accounting for Non-Consolidated

question 46

Multiple Choice

Which of the following accurately reflects the accounting for non-consolidated subsidiaries in Japan?

• A) Cross-holdings of related companies make it difficult to identify a parent company.
• B) Japanese companies are not permitted to use the equity method.
• C) Keiretsu relationships usually have a bank as the major shareholder in related companies.
• D) Earnings and assets of Japanese companies tend to be overstated due to the inclusion of group members in consolidated financial statements.

---

Definitions:

Close Substitutes

Products or services that can easily replace each other in the eyes of consumers due to their similar functions or characteristics.

Imperfectly Competitive

A market structure where individual producers have some control over the price and supply of products, as opposed to perfect competition where no single producer can influence the market.

Market Price

The prevailing rate at which a commodity or service is available for purchase or sale in a specific market.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific time period.