Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Business Organization

Financial Accounting

1. Introduction to Accounting

Business Organization

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Multiple Choice

Which of the following is NOT an advantage of operating as a wholly owned subsidiary?

Ability to protect proprietary technology and processes

Reduced financial risk due to shared ownership

Greater control over operations and decision-making

Full retention of profits generated by the subsidiary

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Verified step by step guidance

Step 1: Understand the concept of a wholly owned subsidiary. A wholly owned subsidiary is a company whose entire stock is owned by another company, typically the parent company. This structure allows the parent company to have full control over the subsidiary's operations and decision-making.

Step 2: Analyze the advantages of operating as a wholly owned subsidiary. These include: (a) the ability to protect proprietary technology and processes, (b) greater control over operations and decision-making, and (c) full retention of profits generated by the subsidiary.

Step 3: Evaluate the statement 'Reduced financial risk due to shared ownership.' In the case of a wholly owned subsidiary, there is no shared ownership because the parent company owns 100% of the subsidiary. Therefore, this statement does not align with the characteristics of a wholly owned subsidiary.

Step 4: Compare the given options to identify which one does not represent an advantage of operating as a wholly owned subsidiary. The correct answer is the one that contradicts the nature of wholly owned subsidiaries, which is 'Reduced financial risk due to shared ownership.'

Step 5: Conclude that the other options (ability to protect proprietary technology, greater control over operations, and full retention of profits) are valid advantages of wholly owned subsidiaries, while the incorrect statement highlights a concept that applies to joint ventures or partnerships instead.