1. Consolidation workpaper entries normally:a Are posted to the general ledger accounts of...

1. Consolidation 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. Consolidation 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 The 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