BruceCo.has accounted for the revenue of Jiffy Mac,Inc. ,one of its suppliers as though it were its subsidiary.BruceCo only owns 2% of Jiffy and does not exercise any influence or control,nor is it considered a Variable Interest Entity.BruceCo.has probably committed fraud because of its blatant misapplication of consolidation principles.

Question

Quizplus · Accepted Answer

BruceCo has committed fraud by misapplying consolidation principles. Even though BruceCo only owns 2% of Jiffy and does not exercise any influence or control, it has accounted for Jiffy's revenue as though it were its subsidiary. This misapplication of consolidation principles is a violation of accounting standards and can lead to fraudulent financial reporting.

BruceCoHas Accounted for the Revenue of Jiffy Mac,Inc