On the Date of Acquisition, Consolidated Shareholder Equity Is Equal

question 70

Multiple Choice

On the date of acquisition, consolidated shareholder equity is equal to:

• A)the sum of the parent and subsidiary's shareholders' equity.
• B)the sum of the parent's shareholder equity plus its pro rata share of the subsidiary's shareholders' equity on the date of acquisition.
• C)the parent's shareholders' equity.
• D)the subsidiary's shareholders equity.

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Definitions:

Retained Earnings

The cumulative amount of net income earned by a company that is retained and not distributed to shareholders as dividends.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.

Net Income

The remaining earnings of a corporation after deducting all operating costs and tax obligations from its revenue.

Dividends Declared

The action by a company's board of directors to distribute a specified amount of the company’s earnings to its shareholders.