24) In general, consolidated financial statements should be prepared a. when a c
ID: 2389777 • Letter: 2
Question
24) In general, consolidated financial statements should be prepareda. when a corporation owns more than 50% of the common stock of another company
b. when a corporation owns more than 20% of the common stock of another company
c. whenever the market value of the stock investment is significantly lower than its cost
d. only when a corporation owns 100% of the common stock of another company
26) The equity method of accounting for investments
a. requires the investment be increased by the dividends paid by the investee
b. requires the investment be increased by the reported net income of the investee
c. requires the investment to be reported at its original cost
d. requires a year-end adjustment to revalue the stock to lower of cost or market
27) Financing activities include
a.
acquiring investments.
b.
lending money.
c. issuing debt.
d.
acquiring long-lived assets.
28) Budget preparation is best determined in a top-down managerial approach.
a. true
b. false
29) The responsibility for coordinating the preparation of a master budget should be assigned to the CEO of a firm.
a. true
b. false
Explanation / Answer
24) In general, consolidated financial statements should be prepared
a. when a corporation owns more than 50% of the common stock of another company
b. when a corporation owns more than 20% of the common stock of another company
c. whenever the market value of the stock investment is significantly lower than its cost
d. only when a corporation owns 100% of the common stock of another company
26) The equity method of accounting for investments
a. requires the investment be increased by the dividends paid by the investee
b. requires the investment be increased by the reported net income of the investee
c. requires the investment to be reported at its original cost
d. requires a year-end adjustment to revalue the stock to lower of cost or market
27) Financing activities include
a.
acquiring investments.
b.
lending money.
c. issuing debt.
d.
acquiring long-lived assets.
28) Budget preparation is best determined in a top-down managerial approach.
a. true
29) The responsibility for coordinating the preparation of a master budget should be assigned to the CEO of a firm.
b. false
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