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.

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Definitions:

Crisis Management

The process by which a business or organization deals with a disruptive and unexpected event that threatens to harm the organization or its stakeholders.

Formal Programs

Structured and officially sanctioned plans or initiatives designed to achieve specific goals within an organization, such as training employees or improving processes.

Nonprogrammed Decisions

Are created to deal specifically with a problem at hand.

Reordering Inventory

A management process that involves replenishing stock to ensure sufficient quantities are available to meet customer demands.