What Is the Primary Accounting Difference Between Accounting for When

question 58

Multiple Choice

What is the primary accounting difference between accounting for when the subsidiary is dissolved and when the subsidiary retains its incorporation?

• A) If the subsidiary is dissolved, it will not be operated as a separate division.
• B) If the subsidiary is dissolved, assets and liabilities are consolidated at their book values.
• C) If the subsidiary retains its incorporation, there will be no goodwill associated with the acquisition.
• D) If the subsidiary retains its incorporation, assets and liabilities are consolidated at their book values.
• E) If the subsidiary retains its incorporation, the consolidation is not formally recorded in the accounting records of the acquiring company.

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Definitions:

Ordinary Holder

A term used in finance to describe a person in possession of a negotiable instrument, like a check or bond, who has certain rights to it.

HDC (Holder in Due Course)

A party that has acquired a negotiable instrument in good faith and for value, therefore enjoying certain legal protections.

Unauthorized

Actions or access that have not been approved or sanctioned by the rightful authority.

Negotiates

The process of discussing and reaching a mutual agreement between parties, often involving the terms and conditions of a contract.