During 20X3, a Parent Company Billed Its 100%-Owned Subsidiary for Computer

question 38

Multiple Choice

During 20X3, a parent company billed its 100%-owned subsidiary for computer services at the rate of $1,000 per month. At year end, one month's bill remained unpaid. As a part of the consolidation process, net income

• A)should be reduced $12,000.
• B)should be reduced $1,000.
• C)needs no adjustment.
• D)needs an adjustment, but the amount is not provided by this information.

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Definitions:

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance.

Coefficient Of Variation

A measure of relative variability calculated as the standard deviation divided by the mean, often expressed as a percentage.

Population Standard Deviation

A measure of the dispersion or spread of a set of values in a population, indicating how much variation exists from the average.

Variance

The measure of how far each number in the dataset is from the mean and from each other, indicating the spread of the distribution.