Ask Question
BusinessBusiness
29 September, 12:11

A change in Accounting Method would be necessary because of which of the following circumstances?

a) An increase in ownership percentage from 25% to 40%

b) A decrease in ownership percentage from 25% to 15%

c) An increase in ownership percentage from 10% to 15%

d) A decrease in ownership percentage always triggers a change in accounting method.

+2
Answers (1)
  1. 29 September, 14:11
    0
    b) A decrease in ownership percentage from 25% to 15%

    Explanation:

    There is change in accounting method when the shareholding is 20% or more.

    Under Consolidation there are two methods:

    Equity method: This is used when the shareholding is 20% or more, and there is significant influence. Under this method all the assets and liabilities are accumulated in the consolidated balance sheet.

    Proportional Consolidation method: This is generally used when the shareholding is merely shown as an investment, and the balances of assets and liabilities are not accumulated.

    Thus, there is a change in method of accounting when the shareholding is more than 20%. This is in case b as change is from 25% to 15% and thus, it will change from equity method to proportional consolidation method.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A change in Accounting Method would be necessary because of which of the following circumstances? a) An increase in ownership percentage ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
If an employer agrees to give you constructive criticism of your interview performance, you need to listen carefully and take notes. true or false
Answers (1)
The following balances come from the financial statements of a company: Sales revenue $ 850,000 Accounts receivable 280,000 Beginning inventory 50,000 Ending inventory 30,000 Net purchases 460,000 Sales returns 50,000 Sales discount 20,000 Given
Answers (1)
Charles wants to start a décor business and takes a loan of $35,000 from the bank to set up the business. Once the business is up and running, Charles will have full control of the business and its profits.
Answers (1)
What will happen when I link two text boxes? When I click on the box, it will take me to a Web site. When the first box is full, it will resize to fit the text entered. When the first box is full, of text it will automatically go to the second box.
Answers (1)
Preparing journal entries-outputs Hartley Company has a production process that involves three processes. Units move through the processes in this order. cutting, stamping, and then polishing.
Answers (1)
New Questions in Business
Which of the following statements is true about using fonts in business documents? A. Sans serif fonts, such as Arial, are best in business letters and emails. B. Use as many different types of fonts in a business letter as you can. C.
Answers (1)
In creating the Wii, how did Nintendo ensure a supply of complements that would motivate customers to adopt its new video game format? a. Nintendo made only a select number of games to run exclusively on the Wii system. b.
Answers (1)
Suppose that B2B, Inc., has a capital structure of 35 percent equity, 16 percent preferred stock, and 49 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.
Answers (1)
C. explain the court's guidelines for deciding discrimination cases.
Answers (1)
Changing workplace procedures tends to be counterproductive
Answers (1)
Home » Business » A change in Accounting Method would be necessary because of which of the following circumstances? a) An increase in ownership percentage from 25% to 40% b) A decrease in ownership percentage from 25% to 15% c) An increase in ownership percentage
Sign Up Forgot Password?