A Company Has Been Using the Fair-Value Method to Account

question 39

Multiple Choice

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly control the investee and the equity method has been deemed appropriate. Which of the following statements is true?

• A) A cumulative effect change in accounting principle must occur.
• B) A prospective change in accounting principle must occur.
• C) A retrospective change in accounting principle must occur.
• D) The investor will not receive future dividends from the investee.
• E) Future dividends will continue to be recorded as revenue.

Evaluate the strengths and criticisms of authentic leadership in organizational contexts.

Comprehend how authentic leadership can be developed and learned.

Identify the role of critical life events in shaping authentic leadership.

Understand the relationship between authentic leadership and positive organizational scholarship.

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Definitions:

Cash Payback Period

The time it takes for a project or investment to generate enough cash to recover the initial investment outlay.

Obsolescence

The process of becoming outdated or no longer used, often as a result of new inventions, technologies, or changes in consumer preference.

Cash Payback Period

The length of time it takes for an investment to generate enough cash flow to recover the initial investment cost.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specified period, representing the overall change in its cash position.