When Consolidated Financial Statements Are Prepared, the Parent Company Uses

question 187

True/False

When consolidated financial statements are prepared, the parent company uses the equity method and reports the investment accounts for the subsidiaries on the balance sheet.

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Definitions:

Outstanding Shares

The total number of shares of a company's stock currently held by all its shareholders, including share blocks and restricted shares.

Issued Shares

The total number of shares that have been sold to and are held by shareholders.

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares plus any amount paid in excess.

Par Value

A nominal value assigned to a share of stock in the corporation's charter, serving as the minimum price at which shares can be issued.