When a Subsidiary Is Acquired Sometime After the First Day

question 61

Multiple Choice

When a subsidiary is acquired sometime after the first day of the fiscal year, which of the following statements is true?

• A) Income from subsidiary is not recognized until there is an entire year of consolidated operations.
• B) Income from subsidiary is recognized from date of acquisition to year-end.
• C) Excess cost over acquisition value is recognized at the beginning of the fiscal year.
• D) No goodwill can be recognized.
• E) Income from subsidiary is recognized for the entire year.

---

Definitions:

Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.

Economically Productive

Activities or processes that generate goods or services which have value and contribute to the economy.

Convey Information

The act of communicating or transmitting information from one entity to another.

Service Industries

Sectors of the economy that provide intangible products such as healthcare, education, and financial services.