Which of the Following Adjustments (If Any) to Retained Earnings

question 8

Multiple Choice

Which of the following adjustments (if any) to Retained Earnings is necessary for the preparation of the Consolidated Balance Sheet?

• A) Under both the Cost and Equity methods, the parent must record its share of its
• Subsidiary's income.
• B) Under both the Cost and Equity methods, the parent must record its share of its
• Subsidiary's income less any dividends received from the subsidiary.
• C) No adjustment is required under either the Cost or the Equity methods.
• D) No adjustment is required if the parent has been using the Equity Method.

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