When Preparing a Consolidated Balance Sheet Worksheet When the Investment

question 1

Multiple Choice

When preparing a consolidated balance sheet worksheet when the investment account is maintained under the simple equity method:

• A)​the parent's share of subsidiary income should be eliminated against retained earnings.
• B)​the parent's share of the subsidiary's equity accounts may be eliminated directly against the investment account.
• C)​any intercompany sales must be eliminated against cost of goods sold.
• D)​the investment account should be converted to the cost method as of the end of the year.

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