Answered: In joint venture accounting, the equity…

In joint venture accounting, the equity method requires? (a) Line-by-line consolidation (b) Recognition of share of profits and net assets (c) Cost method only (d) Fair value accounting

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 16DQ

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In joint venture accounting, the equity method requires? (a) Line-by-line consolidation (b) Recognition of share of profits and net assets (c) Cost method only (d) Fair value accounting

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3. Under the equity method, which of the following decreases the carrying amount of an investment in associate or joint venture? a. share in the profit of the investee b. share in the other comprehensive income of the investee C. share in the dividends declared by the investee d. a decline in the fair value of the investment
The proprietary theory, the entity theory, and the funds theory are three approaches to accounting for equities. Required: a. Describe briefly each of these theories b. State your reasons for emphasizing the application of one of these theories to each of the following: i. Single proprietorship ii. Partnership iii. Financial institutions (banks) iv. Consolidated statements v. Estate accounting
Explain thoroughly why it is the answer.