When Preparing a Set of Consolidated Financial Statements, the Pre-Acquisition

question 23

Multiple Choice

When preparing a set of consolidated financial statements, the pre-acquisition entry relates to:

• A) both the parent and the NCI in the subsidiary;
• B) only the investment by the parent in the subsidiary;
• C) only the investment by the NCI in the subsidiary;
• D) the total investment by the parent in the subsidiary plus the after tax effect of the investment by the NCI.

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Definitions:

Credit Card Payment

A transaction method allowing purchasers to buy goods or services using credit issued by a bank or financial institution.

Progress Billing

A billing method where payments are made to a contractor by a client at various stages of a project, based on progress.

Estimates

Preliminary calculations or projections, often used in accounting and project planning to approximate future costs or revenues.

Audit Trail Report

A record that traces the detailed transactions relating to any operational, financial, or business activity within an organization.