When a Parent Owns Less Than 100% of a Subsidiary,the

question 18

Multiple Choice

When a parent owns less than 100% of a subsidiary,the noncontrolling interest shareholders are allocated their ownership percentage of income or net assets in all of the following eliminating entries except for:

• A)The basic investment account elimination entry
• B)The excess value (differential)reclassification entry
• C)The optional accumulated depreciation elimination entry
• D)The amortized excess value reclassification entry

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.

Income Summary

An account used in the closing process that summarizes all income and expenses for the period, leading to the net profit or loss.

Reversing Entry

An accounting entry that is made at the beginning of a period to negate or cancel out the effects of an adjusting entry made at the end of the previous period.

Common Stock

Holding shares in a corporation that come with privileges to make decisions through voting and to earn dividends from the company's earnings.