Under the Partial Equity Method, the Workpaper Entry That Reverses

question 23

Multiple Choice

Under the partial equity method, the workpaper entry that reverses the effect of subsidiary income for the year includes a:

• A) credit to Equity in Subsidiary Income.
• B) debit to Subsidiary Income Sold.
• C) debit to Equity in Subsidiary Income.
• D) credit to Equity in Subsidiary Income and debit to Subsidiary Income Sold.

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Definitions:

Drawer

In banking and finance, the person who writes or issues a check or draft, instructing the bank to pay a specified amount to the person or entity named.

Contractual Capacity

The legal ability to enter into a binding contract, typically requiring parties to be of a certain age and sound mind.

Negotiation

The process whereby two or more parties discuss and attempt to reach a mutual agreement on matters of common interest.

Forgery

The act of falsely making or altering a document with the intent to deceive or defraud.