Which of the Following Adjustments (If Any) to Retained Earnings

question 8

Multiple Choice

Which of the following adjustments (if any) to Retained Earnings is necessary for the preparation of the Consolidated Balance Sheet?

• A) Under both the Cost and Equity methods, the parent must record its share of its
• Subsidiary's income.
• B) Under both the Cost and Equity methods, the parent must record its share of its
• Subsidiary's income less any dividends received from the subsidiary.
• C) No adjustment is required under either the Cost or the Equity methods.
• D) No adjustment is required if the parent has been using the Equity Method.

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Definitions:

Carefully Calibrate

To adjust or measure something with a high degree of precision and care, ensuring accuracy or optimal performance.

Work Simplification

The standardization and the narrow, explicit specification of task activities for workers.

Task Activities

Activities related to the accomplishment of job duties or responsibilities in a work environment.

Standardization

The degree to which work activities are accomplished in a routine fashion.