Consolidated Financial Statements Are Prepared When One Company Has

question 43

Multiple Choice

Consolidated financial statements are prepared when one company has:

• A)Accounted for the investment using the equity method.
• B)Accounted for the investment as available-for-sale securities.
• C)Control over another company.
• D)None of these is correct.

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Definitions:

Defensive Attribution

A cognitive bias in which individuals attribute causes for behaviors or events to external factors to protect their self-esteem.

Internal Causes

Factors within an individual, such as traits, beliefs, or desires, that explain or influence their behavior.

Stable Causes

Factors or conditions that consistently contribute to an outcome or effect with little variation over time.

Actor-Observer Bias

A cognitive bias involving the tendency to attribute one's own actions to external factors while attributing others' actions to their personality or disposition.