25 S1: Elimination entries for intercompany profit in the consolidation working papers for business combinations are prepared to nullify the effect of intercompany transactions. S2: If a parent company uses the cost method of accounting for a partially owned subsidiary and there are no intercompany profits or losses eliminated for the computation of consolidated net income, consolidated retained earnings attributable to parent is equal to the balance of the parent company’s retained earnings plus the balance of the subsidiary’s retained earnings. Group of answer choices False; True False; False True; True True; False
25 S1: Elimination entries for intercompany profit in the consolidation working papers for business combinations are prepared to nullify the effect of intercompany transactions. S2: If a parent company uses the cost method of accounting for a partially owned subsidiary and there are no intercompany profits or losses eliminated for the computation of consolidated net income, consolidated retained earnings attributable to parent is equal to the balance of the parent company’s retained earnings plus the balance of the subsidiary’s retained earnings. Group of answer choices False; True False; False True; True True; False
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 15MCQ
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Question
25
S1: Elimination entries for intercompany profit in the consolidation working papers for business combinations are prepared to nullify the effect of intercompany transactions.
S2: If a parent company uses the cost method of accounting for a partially owned subsidiary and there are no intercompanyprofits or losses eliminated for the computation of consolidated net income, consolidated retained earnings attributable to parent is equal to the balance of the parent company’s retained earnings plus the balance of the subsidiary’s retained earnings.
S2: If a parent company uses the cost method of accounting for a partially owned subsidiary and there are no intercompany
Group of answer choices
False; True
False; False
True; True
True; False
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