10 Questions
What is the main difference between Entry I and the equity method?
Eliminates the parent's equity in the sub's income and reduces the Investment account
What is the purpose of worksheet Entries I and D?
To eliminate the parent's equity in the sub's income and reduce the Investment account
What is the limitation of the parent's record-keeping in the partial equity method?
Is limited to two periodic journal entries
What is the result of using the partial equity method?
A partial accrual-based measure of income and retained earnings
What is the purpose of the initial value method?
To use the cash basis for income recognition of dividends
What is the main difference between the partial equity method and the equity method?
The partial equity method eliminates the parent's equity in the sub's income
What is the requirement for consolidated financial statements?
A full accrual-based measure of income and retained earnings
What is the impact of the parent's internal accounting method on the consolidated financial statements?
It has no effect on the resulting consolidated financial statements
What is the purpose of new worksheet adjustments?
To convert the parent's beginning-of-the-year retained earnings balance to a full-accrual basis
What is the main difference between Entries S, A, and E?
They are used for different methods of consolidation
Learn about the consolidation entries I and D in subsidiary accounting, including the removal of subsidiary income and the bringing of revenue and expense accounts into consolidated totals. Understand how to prepare consolidation entries for a subsidiary company. Test your knowledge of accounting consolidation entries.
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