A Subsidiary Which Is 75% Owned by Its Parent Company

question 11

Multiple Choice

A subsidiary which is 75% owned by its parent company pays a dividend of $100,000.On consolidation the amount to be eliminated is:

• A) $75,000
• B) $100,000
• C) $25,000
• D) Not eliminated

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Definitions:

Chart of Accounts

A systematic list of all account titles and numbers used by a company, organized to support the recording of transactions.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to verify that the ledger accounts are correctly balanced.

Ledger Balances

The current totals in ledger accounts, reflecting all transactions up to a given point in time.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to verify that total debits equal total credits.