In Order to Reduce the Risk Associated with a New

question 20

Multiple Choice

In order to reduce the risk associated with a new line of business,Conservative Corporation established Spin Company as a wholly owned subsidiary.It transferred assets and accounts payable to Spin in exchange for its common stock.Spin recorded the following entry when the transaction occurred:

-Based on the preceding information,immediately after the transfer,

• A)Conservative's total assets decreased by $23,000.
• B)Conservative's total assets decreased by $20,000.
• C)Conservative's total assets increased by $56,000.
• D)Conservative's total assets remained the same.

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Definitions:

Fiscal Policy

Refers to the use of government spending and taxation policies to influence the economy.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as a percentage increase in real gross domestic product (GDP).

Monetary Policy

The management of a country's money supply and interest rates by its central bank to control inflation and stabilize the currency.

Amount Of Money

The total sum or figure represented in currency units, indicating the value or cost of an item, service, or financial obligation.