Assuming That a Acquired a Controlling Interest in B Through

question 13

Multiple Choice

Assuming that A acquired a controlling interest in B through numerous small acquisitions, what would be appropriate accounting with respect to these acquisitions?

• A) An acquisition differential must be computed following each purchase.
• B) The equity method must be adopted retroactively once 20% ownership is obtained.
• C) The purchases should all be grouped together and treated as a single block purchase.
• D) The cost method should be used until a controlling interest is acquired.

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Definitions:

Monetary Policy

The process by which a government, central bank, or monetary authority manages the supply of money and interest rates to achieve macroeconomic objectives.

Economic Policy

The strategies and actions taken by a government to manage the economy and influence economic conditions including taxation, government budgets, and interest rates.

Loopholes

Provisions or omissions in laws, taxes, or contracts that allow individuals or entities to avoid or circumvent their intended effect, often leading to exploitation.

Businesses Behavior

The patterns, practices, and ethical decisions made by companies in the pursuit of their objectives, including how they interact with their stakeholders, the environment, and the economy.