When Preparing a Consolidation Worksheet for a Parent and Its

question 40

Multiple Choice

When preparing a consolidation worksheet for a parent and its foreign subsidiary accounted for under the equity method, which of the following statements is false?

• A) The cumulative translation adjustment included in the Investment in Subsidiary account is eliminated.
• B) The excess of fair value over book value since the date of acquisition is revalued for the change in exchange rate.
• C) The amount of equity income recognized by the parent in the current year is eliminated.
• D) The allocations of excess of fair value over book value at the date of acquisition are eliminated.
• E) The subsidiary's stockholders' equity accounts as of the beginning of the year are eliminated.

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Definitions:

Plasma

The liquid component of blood, free from cells, consisting of water, salts, hormones, and proteins, critical for transporting nutrients, hormones, and proteins throughout the body.

Dissolved Gases

Gases that are mixed into a liquid, such as oxygen or carbon dioxide in water.

Component

A part or element of a larger whole, especially a part of a machine or system.

Platelets

Small, disk-shaped blood cells essential for blood clotting and wound healing.