When a Company Applies the Partial Equity Method in Accounting

question 40

Multiple Choice

When a company applies the partial equity method in accounting for its investment in a subsidiary and the subsidiary's equipment has a fair value greater than its book value,what consolidation worksheet entry is made in a year subsequent to the initial acquisition of the subsidiary?

• A) Retained earnings
• Investment in subsidiary
• B) Investrnent in subsidiary
• Retained earnings
• C) Investment in subsidiary
• Equity in subsidiary's incoms
• D) Investment in subsidiary
• Additional paid-in capital
• E) Retained earnings
• Adritional paid-in capital

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Definitions:

Object Permanence

Recognition that objects continue to exist when they are not in view.

Locomotive Ability

The capability to move or travel from one place to another, often used in reference to motor skills development in children.

Motor Ability

The capacity to perform movements and tasks involving muscle activity, ranging from gross (large muscle groups) to fine (small muscle groups) motor skills.

Simple Reflex

A basic, involuntary response to a stimulus that involves a simple neural pathway.