Which of the Following Conditions Should Exist If an Associative

question 119

Multiple Choice

Which of the following conditions should exist if an associative entity is to be created?

• A) All the relationships for the participating entities are many-to-many.
• B) The new associative entity has independent meaning.
• C) The new associative entity participates in independent relationships.
• D) All of the above.

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Definitions:

Borrowing Company

A company that takes out a loan or issues debt securities to finance its operations or projects.

Aging of Accounts Receivable

The process of categorizing accounts receivable by their due dates to estimate the amount of bad debts.

Estimated Net Realizable Value

The anticipated fair value of an asset in terms of the amount for which it could be sold, minus the estimated costs of sale or disposal.

Percentage of Net Sales

A financial ratio that represents certain expenses, liabilities, or profits as a percentage of the net sales, used to analyze the financial health and performance of a business.