Choose the correct.Which of the following does not indicate an investor company’s ability to significantly influence an investee?a. Material intra-entity transactions.b. The investor owns 30 percent of the investee but another owner holds the remaining 70 percent.c. Interchange of personnel.d. Technological dependency.

Choose the correct.Which of the following does not indicate an investor company’s ability to significantly influence an investee?a. Material intra-entity transactions.b. The investor owns 30 percent of the investee but another owner holds the remaining 70 percent.c. Interchange of personnel.d. Technological dependency.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 11QE

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Which of the following does not indicate an investor company's ability to significance an investee? A. Technological dependency B. Material intra-entity transactions C. Interchange of personnel D. The investor owns 30 percent of the investee but another owner holds the remaining 70 percent
Which of the following does not indicate an investor company’s ability to significantly influence an investee? Material intra-entity transactions. The investor owns 30 percent of the investee but another owner holds the remaining 70 percent. Interchange of personnel. Technological dependency.
Which one of the following is the least likely reason a company may acquire an ownership interest in another company? Select one: a.To benefit form an overvaluing of assets in the investee company b. To oust an inefficient management team c. To take advantage of operating and/or cost synergies d. To exercise an active role in the business' activities
Which of the following are not part of the components ofthe DuPont system for measuring and evaluating businessperformance?a. Return on sales.b. Residual income.c. Return on investment.d. Capital turnover.e. Number of patents.
. It is a type of business combination wherein an investor, having an existing involvement in the investee, acquires additional investment in order to obtain control over the investee. a. Business combination achieved by contract alone b. Business combination achieved by mere exchanges of equity interests c. Business combination achieved in stages d. Baby step combination
See image attached 1.Compare and analyse the performance of the two companies based on their profit margin, asset turnover, ROCE, and debt equity ratio and explain what the board of Box Limited needs to do to achieve their objective . 2. Which other non-financial measures can influence the decision of the board of Box Limited?
Analyze the impact of external factors (i.e., external to the company) on a company’s financial position. ???Competition. Social. Legal. Economic. Political. Ect??? (any additional external factiors welcome as well)
A statement of financial position allows investors to assess all of the following except the___. WHICH OPTION IS CORRECT? a. capital structure of the enterprise b. liquidity and financial flexibility of the enterprise c. efficiency with which enterprise assets are used d. net realizable value of enterprise assets
Balance Sheet vs. Income Statement: Which financial statement is more significant to an outside investor when making a decision to invest in a prospective company? Give a rationale for it.
Choose the correct. Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee?a. The investee’s reported income adjusted for excess cost over book value amortizations.b. Changes in the fair value of the investor’s ownership shares of the investee.c. Intra-entity profits from upstream sales.d. Other comprehensive income reported by the investee.
Which of the following is NOT normally regarded as being a good reason to establish an ESOP? a. To help retain valued employees. b. To increase worker productivity. c. To make it easier to grant stock options to employees. d. To enable the firm to borrow at a below-market interest rate. e. To help prevent a hostile takeover.
According to IAS 39 Financial Instruments: Recognition and Measurement, at what amount should a financial instrument such as a long-term investment in the shares of a company initially be measured? A. Cost of the nearest equivalent financial instrument B. Fair value of consideration given C. Fair value of consideration given plus directly attributable transaction costs D. Fair value of consideration given less directly attributable transaction costs