Q70. Since the coordination of flight schedules implies a stronger economic link between Rocky
Mountain and Flitenight Air Lines than that implied merely by the ownership percentage, a proportionate consolidation is being considered. Which of the following statements regarding the consolidation method and the proportionate consolidation method is most accurate? A) Both are provisions of U.S. GAAP. B) The proportionate consolidation method differs from the consolidation method in its treatment of minority interest. C) Both report all of the affiliate’s liabilities on the parent’s balance sheet.
Q71. If Flitenight were to account for its Rocky
Mountain investment using the cost method instead of the equity method, Flitenight’s 2004 income statement would reflect its investment in Rocky
Mountain by including which of the following? A) Only a loss of $160,000. B) Only income of $200,000. C) Nothing, since the cost of the acquisition is not adjusted until the asset is sold.
Q72. Which of the following statements about the consolidation method and the equity method is least accurate? A) Both result in the same net worth. B) Only capital flows between parent and investee (such as dividends) appear in the cash flows of the parent. C) Both result in the same net income.
Q73. Regarding Basten’s and Matthews’ statements about the gain/loss that Flitenight had at the end of 2004 on its investment in Rocky
Mountain, which is most accurate? A) Basten’s statement is incorrect and Matthews’ statement is correct. B) Basten’s statement is correct and Matthews’ statement is correct. C) Basten’s statement is correct and Matthews’ statement is incorrect.
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发表于 2009-1-8 10:58
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