A Parent Company Records an Investment in Its Subsidiary Using

question 14

Multiple Choice

A parent company records an investment in its subsidiary using the equity method. Which of the following statements about consolidated net income is true?

• A)Consolidated net income is higher than the net income under the equity method.
• B)Consolidated net income is lower than the net income under the equity method.
• C)Consolidated net income is higher than the net income under the equity method only if the subsidiary is profitable and has not paid any dividends.
• D)Consolidated net income is the same as the net income under the equity method.

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Definitions:

Telephone Claims

Requests or reports made over the phone, typically to insurance companies, about damages or losses.

Express Emotion

The process of conveying one's feelings to others through words, actions, or expressions.

Claim Promptly

The act of quickly reporting or making a formal request, often in the context of customer service or insurance, to address an issue or to receive benefits.

Less Important

Refers to something that holds less significance or priority compared to other elements or concerns.