If a parent company and its subsidiary have accounts receivable from mutually exclusive external sources in the amounts of $35,000 and $20,000, respectively, the consolidated balance sheet for the parent and its subsidiary will show:
A) one accounts receivable balance of $55,000
B) net accounts receivable of $15,000
C) only the parent's accounts receivable balance
D) both amounts, but it will list them in two separate accounts

Question

Quizplus · Accepted Answer

The consolidated balance sheet will show the combined total of both the parent and subsidiary's accounts receivable, which is $55,000. This is because the accounts receivable are from mutually exclusive external sources, meaning that they are not related to each other and can be added together in the consolidation process. Therefore, the consolidated balance sheet will show one accounts receivable balance of $55,000.

If a Parent Company and Its Subsidiary Have Accounts Receivable