When a Parent Uses the Equity Method Throughout the Year

question 111

Multiple Choice

When a parent uses the equity method throughout the year to account for its 80% investment in an acquired subsidiary, which of the following statements is false at the date immediately preceding the date on which adjustments are made on the consolidated worksheet?

• A) Parent company net income equals controlling interest in consolidated net income.
• B) Parent company retained earnings equals consolidated retained earnings.
• C) Parent company total assets equals consolidated total assets.
• D) Parent company dividends equals consolidated dividends.
• E) Goodwill is not recorded on the parent's books.

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Definitions:

Quadratus Lumborum

A deep muscle in the lower back that helps with the stabilization of the pelvis and the spine, as well as aiding in lateral movement of the torso.

Serratus Posterior

A muscle group consisting of the serratus posterior superior and inferior, which aid in the movements of the rib cage.

Splenius Capitis

A muscle in the back of the neck that plays a crucial role in controlling the movement of the head, particularly in extension and rotation.

Vertebral Column

The vertebral column, also known as the spine or backbone, is a series of interconnected bones called vertebrae that enclose and protect the spinal cord while allowing a person to stand upright and move flexibly.