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The Financial Statements quiz #9 Flashcards

The Financial Statements quiz #9
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  • What is the meaning of 'parent company'?
    'Parent company' is a company that controls one or more subsidiaries.
  • What is the meaning of 'subsidiary'?
    'Subsidiary' is a company controlled by another company, known as the parent.
  • What is the meaning of 'affiliated company'?
    'Affiliated company' is a company related to another company by ownership or control.
  • What is the meaning of 'joint venture'?
    'Joint venture' is a business arrangement in which two or more parties share control and profits.
  • What is the meaning of 'associate company'?
    'Associate company' is a company in which another company has significant influence but not control.
  • What is the meaning of 'equity method' in accounting?
    'Equity method' is an accounting technique for investments in associates, recognizing investor's share of earnings.
  • What is the meaning of 'cost method' in accounting?
    'Cost method' is an accounting technique for investments where the investment is recorded at cost and income is recognized when received.
  • What is the meaning of 'consolidation' in accounting?
    'Consolidation' is the process of combining the financial statements of a parent and its subsidiaries.
  • What is the meaning of 'minority interest' in consolidated financial statements?
    'Minority interest' is the portion of net assets and net income of a subsidiary not owned by the parent.
  • What is the meaning of 'push-down accounting'?
    'Push-down accounting' is the practice of recording the effects of a purchase at the subsidiary level.
  • What is the meaning of 'pooling of interests'?
    'Pooling of interests' is an old method of accounting for business combinations, now replaced by the purchase method.
  • What is the meaning of 'purchase method' in business combinations?
    'Purchase method' is an accounting method where the acquirer records assets and liabilities at fair value.
  • What is the meaning of 'business combination'?
    'Business combination' is a transaction in which one company obtains control over another.
  • What is the meaning of 'merger'?
    'Merger' is the combination of two companies into one, with one company surviving.
  • What is the meaning of 'acquisition'?
    'Acquisition' is the purchase of one company by another.
  • What is the meaning of 'spin-off'?
    'Spin-off' is the creation of an independent company by distributing shares of a subsidiary to existing shareholders.
  • What is the meaning of 'split-off'?
    'Split-off' is a transaction where shareholders exchange their shares in the parent for shares in a subsidiary.
  • What is the meaning of 'carve-out'?
    'Carve-out' is the sale of a minority interest in a subsidiary to outside investors.
  • What is the meaning of 'liquidation'?
    'Liquidation' is the process of winding up a company's affairs by selling assets to pay liabilities.
  • What is the meaning of 'bankruptcy'?
    'Bankruptcy' is a legal process for companies unable to pay their debts.
  • What is the meaning of 'reorganization' in bankruptcy?
    'Reorganization' is a process in bankruptcy where a company restructures its debts and operations to continue operating.
  • What is the meaning of 'liquidation value'?
    'Liquidation value' is the estimated amount that would be received if assets were sold and liabilities paid off.
  • What is the meaning of 'going concern value'?
    'Going concern value' is the value of a company as an operating business.
  • What is the meaning of 'book value per share'?
    'Book value per share' is the equity available to common shareholders divided by the number of outstanding shares.