Under the Partial Equity Method, the Entry to Eliminate Subsidiary

question 9

Multiple Choice

Under the partial equity method, the entry to eliminate subsidiary income and dividends includes a debit to:

• A) Dividend Income.
• B) Dividends Declared - S Company.
• C) Equity in Subsidiary Income.
• D) Retained Earnings - S Company.

---

Definitions:

Price Ceiling

A legal maximum price set by the government for a particular good or service, aimed at preventing prices from reaching excessively high levels.

Shortage/Surplus

A shortage occurs when demand exceeds supply for a product or service, whereas a surplus occurs when supply exceeds demand, leading to downward pressure on prices.

Demand Equation

A mathematical expression that relates the quantity of a good that consumers are willing to buy to the good's price and other variables such as income and the price of related goods.

Price Floor

A government-imposed minimum price set above the equilibrium price, preventing market prices from falling below it.