When a Parent Sells Its Interest in a Subsidiary,any Profit

question 34

Multiple Choice

When a parent sells its interest in a subsidiary,any profit or loss generated by the subsidiary:

• A) is transferred to the parent's investment in subsidiary account, and used to calculate the amount of profit or loss on the sale of the shares.
• B) is immediately transferred to the equity section of the consolidated accounts, and is then available from distribution to shareholders.
• C) is set off against any remaining balance in the goodwill on acquisition account, with any remaining amount distributed as dividends to the new owners.
• D) is to be recorded in the consolidated financial statements for the period of the year that the parent had control of the subsidiary.
• E) is to be recorded in the parent's financial statements for the period of the year that the parent had control of the subsidiary.

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Definitions:

Shift Key

A modifier key on a keyboard, used to type capital letters and other alternate "upper" characters.

Control

In a computing context, refers to a graphical component or widget in a user interface that users interact with, such as buttons, sliders, or text boxes.

Form

A document with spaces in which to write or select, for a series of questions or requests for information.

Item

A single data point or element within a collection or list, often referred to in the context of programming, shopping, or inventory.