When a Parent Uses the Equity Method Throughout the Year

question 19

Multiple Choice

When a parent uses the equity method throughout the year to account for its investment in an acquired subsidiary, which of the following statements is false before making adjustments on the consolidated worksheet?

• A) Parent company net income equals controlling interest in consolidated net income.
• B) Parent company retained earnings equals consolidated retained earnings.
• C) Parent company total assets equals consolidated total assets.
• D) Parent company dividends equals consolidated dividends.
• E) Goodwill will not be recorded on the parent's books.

---

Definitions:

Fluid-Filled Sac

A pouch within the body encased by a thin membrane containing liquid; it can occur in various tissues and organs.

Tendons

Fibrous connective tissues that attach muscles to bones, transmitting the force from muscle contraction to move the bone or structure.

Articular Cartilage

A smooth, white tissue that covers the ends of bones where they come together to form joints, helping reduce friction and absorb shock.

Epiphyses

The rounded end of a long bone, which is separated from the main bone by a growth plate during development and later fuses to allow growth in length.