Which of the Following Statements Regarding Consolidated Financial Statements at the Date

question 25

Multiple Choice

Which of the following statements regarding consolidated financial statements at the date of acquisition is FALSE?

• A)Fair value adjustments are used to recognize the identifiable assets and liabilities of the subsidiary at fair values and goodwill measured as a residual amount.
• B)The pre-acquisition adjustments eliminate the pre-acquisition equity of the subsidiary and the investment account recorded by the parent.
• C)When the subsidiary has recorded goodwill at acquisition date, adjustments must be made in the acquisition analysis to determine the amount of goodwill to be adjusted in the consolidation process.
• D)When the subsidiary has recorded a dividend payable at acquisition date, this must be excluded when calculating the consideration received.

---

Definitions:

Office Supplies

Consumable items such as pens, paper, staplers, and other materials that are used in an office setting for daily operations.

Ledger

A ledger is a principal book or computer file for recording and totaling economic transactions by account, separated into debits and credits.

Transaction

An agreement or exchange between parties that involves the transfer of goods, services, or funds.

Account Balance

The total amount of money in a financial account, calculated by adding all deposits and subtracting all withdrawals.