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chap003 - Multiple Choice Questions 1 Which one of the...

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Multiple Choice Questions 1. Which one of the following accounts would not appear on the consolidated financial statements at the end of the first fiscal period of the combination? A) Goodwill B) Equipment C) Investment in Subsidiary D) Common Stock E) Additional Paid-In Capital Answer: C Difficulty: Easy 2. Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a purchase transaction ? 3. Which one of the following varies between the equity, cost, and partial equity methods of accounting for an investment? 4. Under the partial equity method , the parent recognizes income when
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5. Push-down accounting is concerned with the A) impact of the purchase on the subsidiary's financial statements. B) recognition of goodwill by the parent. C) correct consolidation of the financial statements. D) impact of the purchase on the separate financial statements of the parent. E) recognition of dividends received from the subsidiary. Answer: A Difficulty: Easy 6. Racer Corp. purchased all of the common stock of Tangiers Co. several years ago. Tangiers maintained its incorporation. Balances in which of Racer's accounts would vary between the equity method and the cost method ?
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