The Following Information Pertains to Questions

question 50

Multiple Choice

The following information pertains to questions
GNR Inc owns 100% of NMX Inc.During the year,NMX Inc earned a net income of $40,000 and paid Dividends of $10,000.
-Assuming once again that GNR owned 80% of NMX instead of 100%,what would be the effect on GNR's investment in NMX account under the Cost Method?

• A)An increase of $30,000.
• B)An increase of $40,000.
• C)An increase of $24,000.
• D)No effect.

---

Definitions:

Deductive Reasoning

A logical process where a conclusion is based on the concordance of multiple premises that are generally assumed to be true.

Ultimate Attribution Error

A bias in which positive behaviors by out-group members are attributed to situational factors, while negative behaviors are attributed to their character.

Group-Enhancing Bias

A cognitive bias that leads people to view their own group more favorably compared to others.

Group Production Blocking

A process during collaborative work where the flow of ideas or productivity is impeded because only one group member can contribute at a time.