The SEC Requires the Use of Push-Down Accounting in Some

question 8

Multiple Choice

The SEC requires the use of push-down accounting in some specific situations.Push-down accounting results in:

• A)​goodwill be recorded in the parent company separate accounts.
• B)​eliminating subsidiary retained earnings and paid-in capital in excess of par.
• C)​reflecting fair values on the subsidiary's separate accounts.
• D)​changing the consolidation worksheet procedure because no adjustment is necessary to eliminate the investment in subsidiary account.

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Definitions:

Free Samples

Small quantities of a product given at no charge, allowing consumers to try before making a purchase decision.

Reciprocity Norm

A social norm suggesting that people should return the help they have received from others, creating a cycle of mutual assistance.

Social Influence Tactics

Strategies used by individuals or groups to change the beliefs, attitudes, or behaviors of others in a particular direction.

Scarcity

The state of being in short supply; a situation where resources are insufficient to satisfy the needs or wants of individuals or societies.