Which of the Following Statements Is Incorrect Regarding a Parent's

question 35

Multiple Choice

Which of the following statements is incorrect regarding a parent's purchase of additional subsidiary shares?

• A)There can never be an income statement gain or loss.
• B)​Due to the constraints of conservatism, there can never be an income statement gain but a loss should be recognized if so indicated.
• C)​If the price paid to reacquire the shares exceeds their book value, the debit first is used to reduce existing paid-in capital in excess of par from retirement and the balance is a debit to Retained Earnings.
• D)​If the price paid to reacquire the shares is less than their book value, there is a credit to paid-in capital in excess of par from retirement.

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Definitions:

Pipeline

A system or process for developing and advancing employees through a series of roles or stages to prepare them for future leadership positions.

Workforce

The collective group of individuals engaged in or available for work, either in a specific region or industry.

Human Capital

Human capital is the collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value for the individuals themselves, their employers, or their community.

Empirical Research

A way of gaining knowledge by means of direct and indirect observation or experience, often involving systematically collected data.