Which of the Following Internal Record-Keeping Methods Can a Parent

question 62

Multiple Choice

Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination?

• A) Initial value or book value.
• B) Initial value, lower-of-cost-or-market-value, or equity.
• C) Initial value, equity, or partial equity.
• D) Initial value, equity, or book value.
• E) Initial value, lower-of-cost-or-market-value, or partial equity.

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Definitions:

Gain on Sale of Land

The financial profit earned from selling land for more than its purchase cost.

Interest Revenue

Income earned from lending money or through investments that pay interest, contributing to a company's overall revenue.

Rent Expense

An expense incurred for using a property or location for business purposes.

Operating Items

Financial transactions and events related to the core business operations of a company, including sales, services, and the cost of goods or services sold.