In Which of the Following Does the Franchise Operate Under

question 17

Multiple Choice

In which of the following does the franchise operate under the franchisor's business name and act subject to the franchisor's standards and methods of business operation?

• A) Distributorship
• B) Manufacturing arrangement
• C) Chain-style business operation
• D) Approved business franchise
• E) Acknowledged standards operation

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.

Excess Consideration

The amount paid over and above the fair value of net assets acquired in a business acquisition.

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of its identifiable net assets.

Equity Income

Income earned by an investor from an investment in the stock of a company, typically through dividends and the investment's appreciation in value.