On the Date of Acquisition, Consolidated Shareholders' Equity Under Proprietary

question 49

Multiple Choice

On the date of acquisition, consolidated shareholders' equity under proprietary theory is equal to:

• A) the sum of the parent and subsidiary's shareholders' equities.
• B) the sum of the parent's shareholders' equity plus its pro rata share of the subsidiary's shareholders' equity on the date of acquisition.
• C) the parent's shareholders' equity.
• D)the subsidiary's shareholders' equity.

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Definitions:

Inventory Units

The quantity of individual items or products that a company holds in stock at any given time.

Cost Flow Assumption

An accounting method used to value the cost of goods sold and ending inventory.

Specific Identification

Specific Identification is an inventory valuation method where costs are assigned to individual items, allowing for precise cost determination of sold goods.

Cost Flow Assumption

An accounting approach to determine the value of remaining inventory and cost of goods sold, not necessarily reflecting the actual physical flow of goods.