A Parent Entity Made an Advance of $50 000 to Its

question 26

Multiple Choice

A parent entity made an advance of $50 000 to its subsidiary. The parent charges interest of $3000 on this advance. The consolidation adjustment to eliminate the advance is:

• A) DR Interest revenue \(\quad\$ 53000\)
• CR Interest expense \(\quad\$ 53000\)
• B) DR Interest expense \(\quad\) \(\$ 53,000\)

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Definitions:

Group Think

A behavioral pattern seen in a collective where the need for unity or agreement leads to unwise or ineffective choices due to suppressed dissent or critical thought.

Cohesive

The quality of forming a united whole, often used to describe the unity within a group or team.

Conformity

The act of aligning one's behaviors, beliefs, or standards to match those of a group or societal norms.

Close Minded

Having or showing a rigid opinion or standpoint, not open to new ideas or arguments.