Statement 1: The balance in the “allowance for mark-up” account represents the home office’s realized mark-up on shipments to the branch. Statement 2: The branch records an allocated overhead expense form the home office as a credit to the “home office” account. Statement 3: A subsidiary is not excluded from consolidation simply because the investor is a venture capital organization, mutual fund, unit trust or similar entity. Statement 4: Influence is the power to govern the financial and operating polices of an entity so as to obtain benefits from its activities. Which of the statements above are correct?
Statement 1: The balance in the “allowance for mark-up” account represents the home office’s realized mark-up on shipments to the branch. Statement 2: The branch records an allocated overhead expense form the home office as a credit to the “home office” account. Statement 3: A subsidiary is not excluded from consolidation simply because the investor is a venture capital organization, mutual fund, unit trust or similar entity. Statement 4: Influence is the power to govern the financial and operating polices of an entity so as to obtain benefits from its activities. Which of the statements above are correct?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Statement 1: The balance in the “allowance for mark-up” account represents the home office’s realized mark-up on shipments to the branch.
Statement 2: The branch records an allocated
Statement 3: A subsidiary is not excluded from consolidation simply because the investor is a venture capital organization, mutual fund, unit trust or similar entity.
Statement 4: Influence is the power to govern the financial and operating polices of an entity so as to obtain benefits from its activities.
Which of the statements above are correct?
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