When Consolidating a Foreign Subsidiary, Which of the Following Statements

question 39

Multiple Choice

When consolidating a foreign subsidiary, which of the following statements is true?

• A) Parent reports a cumulative translation adjustment from adjusting its investment account under the equity method.
• B) Parent reports a gain or loss in net income from adjusting its investment account under the equity method.
• C) Subsidiary's cumulative translation adjustment is carried forward to the consolidated balance sheet.
• D) Subsidiary's income/loss is carried forward to the consolidated balance sheet.
• E) All foreign currency gains/losses are eliminated in the consolidated income statement and balance sheet.

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Definitions:

Advanced Industrial Society

A society characterized by high levels of industrialization, technological advancement, and standard of living.

Positive Economic Analysis

The branch of economics that concerns the description and explanation of economic phenomena, focusing on factual and cause-and-effect relationships.

Financial Aid

Monetary assistance provided to individuals to support them in covering the costs of education, housing, or other expenses.

Normative Statement

Statements that express opinions about what ought to be, reflecting values or judgements rather than factual assertions.