Which of the Following Statements Is True Regarding the Sale

question 1

Multiple Choice

Which of the following statements is true regarding the sale of subsidiary shares when using the acquisition method for accounting for business combinations?

• A) If control continues, the difference between selling price and acquisition value is recorded as a realized gain or loss.
• B) If control continues, the difference between selling price and acquisition value is an unrealized gain or loss.
• C) If control continues, the difference between selling price and carrying value is recorded as an adjustment to additional paid-in capital.
• D) If control continues, the difference between selling price and carrying value is recorded as a realized gain or loss.
• E) If control continues, the difference between selling price and carrying value is recorded as an adjustment to retained earnings.

---

Definitions:

Free-Market School

An economic theory advocating minimal governmental involvement in the economy, emphasizing the role of supply and demand in regulating prices and resources.

Government Interference

Refers to the involvement or actions by a government in market operations or the personal affairs of its citizens, often to correct market failures or protect public interests.

Planetary Management

A strategy or system for managing the Earth's resources and environment to ensure sustainability and balance between human needs and environmental protection.

Free-Market Global Economy

An economic system where prices for goods and services are determined by the open market and consumers, operating on a global scale without restrictive regulations.