Which of the Following Is Required When Preparing a Consolidated

question 39

Multiple Choice

Which of the following is required when preparing a consolidated balance sheet on the date of the formation of a subsidiary by its parent company?

• A) The assets and liabilities of the subsidiary must be revalued to fair value.
• B) The goodwill from the business combination must be calculated.
• C) The parent's investment account must be eliminated against the subsidiary's share capital.
• D) The parent's investment account must be eliminated against the subsidiary's retained earnings.

---

Definitions:

Illness Anxiety Disorder

A psychiatric condition characterized by excessive worry about having a serious, undiagnosed medical illness despite minimal or no medical symptoms.

Psychogenic Pain

Pain that originates from psychological factors rather than physical causes, also known as psychosomatic pain.

Conversion Disorder

A disorder where emotional distress is expressed through physical symptoms without a medical cause.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification system for mental disorders used by healthcare professionals.