Questions from Financial Accounting

Q: The International Accounting Standards Board (IASB) is charged with developing

The International Accounting Standards Board (IASB) is charged with developing a set of high quality standards and encouraging their adoption globally. Standards promulgated by the IASB are called Int...

Q: : A variable interest entity (VIE) is a structure frequently

A variable interest entity (VIE) is a structure frequently used for off-balance sheet financing. VIEs have become quite numerous in recent years and have been the subject of some controversy. a. Bri...

Q: A variety of organizational structures are used by major companies, and

A variety of organizational structures are used by major companies, and different approaches to consolidation are sometimes found. Two large and familiar U.S. corporations are Union Pacific and ExxonM...

Q: A reader of Gigantic Company’s consolidated financial statements received from another source

A reader of Gigantic Company’s consolidated financial statements received from another source copies of the financial statements of the individual companies included in the consolidation. The person i...

Q: The concept of the accounting entity often is considered to be the

The concept of the accounting entity often is considered to be the most fundamental of accounting concepts, one that pervades all of accounting. For each of the following, indicate whether the entity...

Q: Dell Computer Corp. and CIT Group Inc. established Dell Financial

Dell Computer Corp. and CIT Group Inc. established Dell Financial Services LP (DFS) as a joint venture to provide financing services for Dell customers. Dell originally purchased 70 percent of the equ...

Q: Many well-known products and names come from companies that may

Many well-known products and names come from companies that may be less well known or may be known for other reasons. In some cases, an obscure parent company may have well-known subsidiaries, and oft...

Q: A and B Companies have been operating separately for five years.

A and B Companies have been operating separately for five years. Each company has a minimal amount of liabilities and a simple capital structure consisting solely of voting common stock. In exchange f...

Q: Penn Inc., a manufacturing company, owns 75 percent of the

Penn Inc., a manufacturing company, owns 75 percent of the common stock of Sell Inc., an investment company. Sell owns 60 percent of the common stock of Vane Inc., an insurance company. In Penn’s cons...

Q: Which of the following is the best theoretical justification for consolidated financial

Which of the following is the best theoretical justification for consolidated financial statements? a. In form, the companies are one entity; in substance, they are separate. b. In form, the companies...