.Assuming no intercompany transactions, which of the following is a false statem

Question

.Assuming no intercompany transactions, which of the following is a false statement about a parent company and its 80%-owned subsidiary?

a. Net income of the parent company is the same whether or not consolidated financial statements are prepared.

b. Consolidated financial statements include 100% of the assets and liabilities of the subsidiary.

c. The noncontrolling interest of the subsidiary is not shown on the consolidated balance sheet.

d. The consolidated financial statements are the same, regardless of whther the parent company uses the cost or equity method of accounting for its investment in the subsidiary.

Explanation / Answer

c. The noncontrolling interest of the subsidiary is not shown on the consolidated balance sheet.

non-controlling interests in the profit or loss of consolidated subsidiaries for thereporting period are identified. Non-controlling interests in the net assets of consolidated subsidiaries are identifiedseparately from the parent’s ownership interests in them.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.