When a Parent Uses the Initial Value Method Throughout the Year

question 24

Multiple Choice

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

• A) Parent company net income equals 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 equal consolidated dividends.
• E) Goodwill needs to be recognized on the parent's books.

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Definitions:

Professional Achievements

Professional achievements are milestones or accomplishments realized in one's career, contributing to the individual's growth and recognition in their field.

Minority Group Members

Individuals belonging to a specific group within a population that is smaller in numbers and often faces different treatment or discrimination compared to the majority group.

Dominant Culture

The prevailing cultural practices, values, and beliefs that are considered the norm within a society or a specific social group.

Cultural Assimilation

The process through which a person or a group's language and/or culture come to resemble those of another group, often losing their original identity.