Activities Between Affiliated Entities Such as Subsidiaries Must Be Disclosed

question 82

Multiple Choice

Activities between affiliated entities such as subsidiaries must be disclosed in the financial statements of a corporation as

• A) segment analysis.
• B) significant events.
• C) related party transactions..
• D) contingent activities.

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Definitions:

Mixed Cost

Expenses that have both fixed and variable components, changing with levels of production but not in direct proportion.

Variable Cost

A cost that varies with the level of output or sales, such as materials or commissioned labor.

Fixed Cost

A cost that does not vary with the level of output or sales over a certain period, such as rent or salaries.

Break-even Point

The point at which total costs and total revenue are equal, meaning no profit or loss is made, illustrating the minimum sales volume needed to cover fixed and variable costs.