Question

Answer the questions: True or False

17. A noncontrolling interest is essentially the portion of equity (net assets) interest in a subsidiary that is not attributable to the parent company. (T/F)

18. The primary advantage of the single-step format lies in the simplicity of presentation and the absence of any implication that one type of revenue or expense item has priority over another. (T/F)

19. Use of the phrase “income from continuing operations” is only necessary when gains or losses on discontinued operations occur. (T/F)

Answer 1

Answer:

17.A non controlling interest is essentially the portion of equity (net assets) interest in a subsidiary that is not attributable to the parent company. (T/F)

Ans: True

Explanation: A noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest. For example, 80 percent of a subsidiary’s ownership (equity) interests are held by the subsidiary’s parent, and 20 percent of a subsidiary’s ownership interests are held by other owners. The ownership interests in the subsidiary that are held by owners other than the parent is a noncontrolling interest. The noncontrolling interest in a subsidiary is part of the equity of the consolidated group

18.The primary advantage of the single-step format lies in the simplicity of presentation and the absence of any implication that one type of revenue or expense item has priority over another. (T/F)

Ans: True

Explanation: A single step income statement is a financial statement format that lists all expenses including cost of good sold in one column. In other words, the single step income statement presentation doesn’t break expenses out into categories like cost of goods sold, operating, non-operating, and other. All of the expenses are listed together and totaled.

19. Use of the phrase “income from continuing operations” is only necessary when gains or losses on discontinued operations occur. (T/F)

Ans: True