When using the equity method of accounting, when is revenue recorded on the books of the investor company?a. When the fair value of the affiliate stock increases.b. When a dividend is received from the affiliate.c. When the affiliate company reports net income.d. Both b and c above.

Q: How is the investor’s share of gross profit on intra-entity sales calculated? Under the equity…

A: The share of investor is calculated in the following manner in an intra-entity sale: Investor's…

Q: Q. Which of the following is within the scope of investments accounted for using the equity method…

A: Equity Method of accounting:           Any entity can invest in another entity by acquiring less…

Q: Certain changes that cause adjustments in the current and future periods: a. Changes in Financial…

A: Definition:

Q: credit to Investment in Peas Company.

A: Under equity method, the journal entry for receipt of cash dividend is Cash  A/c  Dr  xxxx    To…

Q: Which of the following is/are true about accounting for business combinations when stock is issued…

A: Accounting treatment for expenses in business combinations:               When a company acquires…

Q: The sale of stock and the sale of bonds are reported as financing activities. Are payments of…

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Q: Which of the following represents a liability? The obligation to pay for goods that an entity…

A: The assets and liabilities are the main aspects of the business which are recorded in the balance…

Q: is a correct statement below? A. Equity is the residual interest in the liabilities of the entity…

A: Option A is incorrect The correct statement is  Equity is the residual interest in the assets of the…

Q: The journal entry to record the amount receivable when a call is made by the company is: Select one:…

A: Calls on Share: Calls on shares signify the company's right on somewhat paid offers to pay part or…

Q: According to PAS 1, dividends declared by an entity are disclosed in the a.    Statement of changes…

A: According to PAS 1 Presentation of Financial Statements the dividends declared by the company will…

Q: Retained earnings, as a form of equityfinancing, area. gross earnings.b. profits before taxes.c.…

A: Equity financing: It is a method to raise money for business operations and growth. Retained…

Q: share-based payment transaction provides that the employees have the right to choose the settlement…

A: Share based payment is an agreement  between  organization  and other party ( including  employees)…

Q: The total owners' equity is usually under a number of subcaptions on the corporations balance sheet.…

A: Shareholder equity is the section that foremost comes in the liability side of the balance sheet

Q: Consider the following statements. I. In applying the Equity Method of accounting for investments in…

A: Equity method: This method is an accounting technique that a company uses to record the profits that…

Q: Match each ratio that follows to its use. Items may be used more than once.     Indicate…

A: Definition:   Ratio analysis: Ratio analysis is a quantitative method of gaining insight into a…

Q: e Current Liabilities Compute for the Non-current

A: The current asset as,

Q: The equity method of accounting for investments requires a.the investment to be increased by the…

A:

Q: What are the four different methods of accounting for investment? Please concisely explain the four…

A: As multiple questions are given, we will answer three question. Methods of accounting for investment…

Q: Which of the following statements is TRUE regarding the equity method?    A. The equity method is…

A: The investor's equity in the associate adjusts in direct connection to the adjustments in the…

Q: Which of the following is not a component of the statement of changes in equity? * Comprehensive…

A: Owner’s capital is the capital contributed by the proprietors in order to begin and run business…

Q: Under the equity method for investments in associates, the investor recognizes its share of the…

A: Explanation: As per the IAS, the investor can recognize its share of the earnings of the period in…

Q: When a business has Available-for-Sale Securities, the account Unrealized Loss on Available-for-Sale…

A: Available-for-sale securities Available-for-securities are referred to as equity or debt security…

Q: If a company uses the equity method to account for an investment in another company, which of the…

A: The equity method is used when a company has ownership in another company of 20% to 50% of the…

Q: Briefly explain the concept of ex-dividend date, record date, date payable, dividend franking and…

A: Ex-dividend date: The ex-dividend date is a particular day on which stock goes ex-dividend. Such an…

Q: Which of the following is not an account appearing in the equity section of a corporation's…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which one of the following journal entries is correct when payment for share issue expenses are…

A: There are three golden rules in accounting for recording the transaction : Debit what comes in ,…

Q: NU Corporation declares and distributes dividend that is a result of current earnings. How will the…

A: Solution Note : As per the Q&A guideline we are required to answer the first question only…

Q: ou are asked to identify how each of these items is shown in the financial statements. (a) gain…

A: Financial Statements are prepared by the management for reporting purposes. These are the essential…

Q: f the employee has the choice as to whether the settlement is in cash or by issuance of equity…

A: A Compound Financial Instrument is an instrument that has the characteristic of both an equity and…

Q: Which one of the following dates is the date on which the board of directors votes to pay a…

A: Record Date is the date used as a reference to understand which shareholder will get the dividend…

Q: In a limited company which of the following is shown in the statement of changes in equity?     a.…

A: Statement of changes in equity: The statement of change in equity includes profit earned or transfer…

Q: Which of the following results in a decrease in the investment account when applying the equity…

A: The equity method is generally applied in case of investment in associate/ joint venture

Q: According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a…

A: In the equity method, investments are 1st recorded at cost and later adjusted based on the changes…

Q: Describe the accounting for bonds payable, including bonds issued at face amount, bonds issued at a…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following dates has the shareholder theoretically realized income from dividend? a.…

A: Solution: The date when shareholders theortically realized income from dividends is "The date the…

Q: Owner’s equity represents which of the following? a. the total of retained earnings plus paid-in…

A: Owner equity means the amount that belong to the businessmen including the capital , retained…

Q: The gross increase in stockholder’s equity attributable to business activities are called: a)…

A: Stock holders equity = equity share capital + Reserves and surplus

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is