There Are Alternative Ways to Calculate Consolidated Retained Earnings

question 1

Multiple Choice

There are alternative ways to calculate consolidated retained earnings. One of the methods requires adjustments to be made to the parent company's separate-entity ending retained earnings balance as of the consolidation date. What adjustments must be made to determine ending consolidated retained earnings?

• A)Add in the dividends from the subsidiary to the parent and the parent's share of the subsidiary's adjusted income.
• B)Subtract the dividends from the subsidiary to the parent and the parent's share of the subsidiary's adjusted income.
• C)Add in the dividends from the subsidiary to the parent and subtract the parent's share of the subsidiary's adjusted income.
• D)Subtract the dividends from the subsidiary to the parent and add in the parent's share of the subsidiary's adjusted income.

Acknowledge the need for information transparency for effective decision-making and employee influence.

Recognize the role of emotion in decision-making processes.

Understand the leader's perspective in the context of psychological empowerment.

Describe the importance of formal decision procedures in empowerment programs.

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Definitions:

Aggregate Saving

The total amount of saving in the economy, consisting of both private savings by individuals and public savings by the government.

Keynesian Macroeconomic Theory

An economic theory stating that government intervention through fiscal and monetary policy can manage economic fluctuations.

Long-Run Equilibrium

A state in which all factors of production and market forces are fully adjusted, leading to a consistent and stable economic situation.

Short-Run Equilibrium

The state in economics where demand equals supply in the short term, and all prices are in balance.