1. Workpaper entries normally:a. Are posted to the general ledger accounts of one or more of the affiliatesb. Are posted to the general ledger accounts only when the financial statement approach is usedc. Are posted to the general ledger accounts only when the trial balance approach is usedd. Do not affect the general ledger accounts of any of the affiliates2.

Chapter 4, Exercises #1
1. Workpaper entries normally:
a. Are posted to the general ledger accounts of one or more of the affiliates
b. Are posted to the general ledger accounts only when the financial statement approach is used
c. Are posted to the general ledger accounts only when the trial balance approach is used
d. Do not affect the general ledger accounts of any of the affiliates
2. Workpaper techniques assume that nominal accounts are:
a. Open when the financial statement approach is used
b. Open when the trial balance approach is used
c. Open in all cases
d. Closed
3. Most errors made in consolidating financial statements will appear when:
a. T he consolidated balance sheet does not balance
b. Consolidated net income does not equal parent net income
c. The retained earnings amount on the balance sheet does not equal the amount on the retained earnings statement
d. Adjustment and elimination column totals do not equal
4. Net income on consolidation workpapers is:
a. Adjusted when the parent uses the cost method
b Adjusted when the parent uses the equity method
c. Adjusted in all cases
d. Not an account balance and not subject to adjustment
5. On consolidation workpapers, individual stockholders’ equity accounts of a subsidiary are:
a. Added to parent stockholders’ equity accounts
b. Eliminated
c. Eliminated only to the extent of noncontrolling interest
d. Eliminated to the extent of the parent’s interest
6. On consolidation workpapers, investment income from a subsidiary is:
a. Added to the investment account
b. Added to the parent’s beginning retained earnings
c. Allocated between controlling and noncontrolling stockholders
d. Eliminated
7. On consolidation workpapers, the investment in subsidiary account balances are:
a. Allocated between controlling and noncontrolling interests
b. Always eliminated
c. Carried forward to the consolidated balance sheet
d.
Eliminated when the financial statement approach is used
8. On consolidation workpapers, the controlling share of consolidated net income is determined by:
a. Adding net income of the parent and subsidiary
b. Deducting consolidated expenses and noncontrolling interest share from consolidated revenues
c. Making adjustments to the parent’s income
d. Subtracting noncontrolling interest share from parent net income
9. On consolidation workpapers, consolidated ending retained earnings is determined by:
a. Adding beginning consolidated retained earnings and the controlling share of consolidated net income and subtracting parent dividends
b. Adding end-of-the-period retained earnings of the affiliates
c. Adjusting beginning parent retained earnings for subsidiary profits and dividends
d. Adjusting the parent’s retained earnings account balance
10. Under the trial balance approach to consolidation workpapers, which of the following is used?
a. Unadjusted trial balances
b. Adjusted trial balances
c. Postclosing trial balances
d. Either a or b, depending on the circumstances

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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Related Book For answer-question

Advanced Accounting

11th Edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

ISBN: 9780132568968

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