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ACC 401 WEEK 7 QUIZ

ACC 401 Week 7 Quiz,
ACC 401 Week 7 Quiz – Strayer

Chapter 8

Changes in Ownership Interest

Multiple Choice

1. When the parent company sells a portion of its investment in a subsidiary, the workpaper entry to adjust for the current year’s income sold to noncontrolling stockholders includes a

a. debit to Subsidiary Income Sold.

b. debit to Equity in Subsidiary Income.

c. credit to Equity in Subsidiary Income.

d. credit to Subsidiary Income Sold.

2. A parent company may increase its ownership interest in a subsidiary by

a. buying additional subsidiary shares from third parties.

b. buying additional subsidiary shares from the subsidiary.

c. having the subsidiary purchase its shares from third parties.

d. all of these.

3. If a portion of an investment is sold, the value of the shares sold is determined by using the:

1. first-in, first-out method.

2. average cost method.

3. specific identification method.

a. 1

b. 2

c. 3

d. 1 and 3

4. If a parent company acquires additional shares of its subsidiary’s stock directly from the subsidiary for a price less than their book value:

1. total noncontrolling book value interest increases.

2. the controlling book value interest increases.

3. the controlling book value interest decreases.

a. 1

b. 2

c. 3

d. 1 and 3

5. If a subsidiary issues new shares of its stock to noncontrolling stockholders, the book value of the parent’s interest in the subsidiary may

a. increase.

b. decrease.

c. remain the same.

d. increase, decrease, or remain the same.

6. The purchase by a subsidiary of some of its shares from noncontrolling stockholders results in the parent company’s share of the subsidiary’s net assets

a. increasing.

b. decreasing.

c.…...

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