What Is the Effect If an Unconsolidated Subsidiary Is Accounted

question 2

Multiple Choice

What is the effect if an unconsolidated subsidiary is accounted for by the equity method but consolidated statements are being prepared for the parent company and other subsidiaries?

• A)​All of the unconsolidated subsidiary's accounts will be included individually in the consolidated statements.
• B)​The consolidated retained earnings will not reflect the earnings of the unconsolidated subsidiary.
• C)​The consolidated retained earnings will be the same as if the subsidiary had been included in the consolidation.
• D)​Dividend revenue from the unconsolidated subsidiary will be reflected in consolidated net income.

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Definitions:

Core Regions

Areas that dominate a country or region's economy, politics, and culture, often having advanced technological development and high levels of productivity.

Wallerstein's Theory

Refers to the world-systems theory, which analyzes the world economy as a complex system structured by capitalist exploitation and nation-state competition.

Cultural Domination

The imposition of the customs, behaviors, practices, and beliefs of one culture over another, often resulting in the suppression of the dominated culture's values.

Colonization

The action or process of settling among and establishing control over the indigenous people of an area.