Consolidated Net Income for a Parent and Its Partially-Owned Subsidiary

question 125

Multiple Choice

Consolidated net income for a parent and its partially-owned subsidiary would always be equal to the total of the parent company's net income:

• A) plus the subsidiary's net income
• B) plus the minority percentage of the subsidiary's net income
• C) plus the subsidiary's net income and the net income of the minority interest
• D) plus the parent's share of the subsidiary's net income

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Definitions:

Effective Interest Method

A method of calculating the interest expense on a bond or loan that considers the impact of amortizing premium or discount over the life of the financial instrument.

Interest Expense

The cost incurred by an entity for borrowed funds, such as loans or bonds.

Discount on Bonds Payable

The difference when a bond is issued for less than its face value, which affects the interest expense over the bond's life.

Par Value

The face value of a bond or stock, representing the amount that will be returned to the holder at maturity, often used as a legal face value for stocks.