An associate is an entity in which an investor has significant influence over the investee. Which TWO of the following indicate the presence of significant influence? I The investor owns 360,000 of the 1,500,000 equity voting shares of the investee. II The investor has representation on the board of directors of the investee. III The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor.
An associate is an entity in which an investor has significant influence over the investee. Which TWO of the following indicate the presence of significant influence? I The investor owns 360,000 of the 1,500,000 equity voting shares of the investee. II The investor has representation on the board of directors of the investee. III The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
An associate is an entity in which an investor has significant influence over the investee.
Which TWO of the following indicate the presence of significant influence?
I The investor owns 360,000 of the 1,500,000 equity voting shares of the investee.
II The investor has representation on the board of directors of the investee.
III The investor is able to insist that all of the sales of the investee are made to a subsidiary of the
investor.
IV The investor controls the votes of a majority of the board members
A I and III
B II and IV
C I and II
D III and IV
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education