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ZK

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Diaz Ltd. acquired 35% of Saturn Ltd. many years ago. At first, Saturn was profitable, but recently, it has been posting losses. Diaz believes that Saturn will be profitable again and has no plans to dispose of it, even though Diaz's share of the losses has exceeded its investment interest. Diaz uses the equity method. Which of the following statements is true?

A) Diaz should continue to decrease its "Investment in Saturn" account.
B) Diaz should put its share of Saturn's losses in a contra-account to its "Investment in Saturn" account, to be reduced by Saturn's future profits.
C) Diaz should reduce its retained earnings directly by its share of Saturn's losses.
D) Diaz should stop recognizing its share of Saturn's losses and not recognize Saturn's future profits until they exceed the unrecognized losses.

On Jul 11, 2024


D
ZK

Answered

If a firm takes actions that reduce its DSO,then,other things held constant,this will lengthen its CCC.

On Jul 06, 2024


False
ZK

Answered

A tax preparation firm
A)Service business
B)Manufacturing business
C)Retail business

On Jun 11, 2024


a
ZK

Answered

Macroeconomists test their theories using controlled economy-wide experiments of various kinds.

On Jun 06, 2024


False
ZK

Answered

Ethics can be defined as a set of standards of acceptable conduct and moral judgment.

On May 07, 2024


True
ZK

Answered

Congruence refers to a condition in which members of an organization's words, thoughts, feelings, and actions of a sender are the same as those of the receiver.

On May 04, 2024


False