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

question 31

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.

---

Definitions:

John B. Watson

A prominent psychologist and the founder of behaviorism, emphasizing the study of observable behavior over the mind.

Generalized Expectancies

Beliefs about how often actions lead to rewards versus punishment.

Reinforcement Value

How enticing a particular reward is.

External Locus

The belief that one's life events are largely controlled by external forces or fate rather than one's own efforts.