During the current year, a partly owned subsidiary has made a transfer from a general reserve to retained earnings. Which of the following lines would appear in the NCI consolidation entry relating to the current year transfer?
A) CR NCI
B) CR Retained earnings
C) DR General reserve
D) DR Transfer from general reserve

Question

Quizplus · Accepted Answer

The transfer from a general reserve to retained earnings would result in a debit to the general reserve and a credit to retained earnings. As the question specifically asks for the NCI consolidation entry, we are looking for the impact on the Non-Controlling Interest (NCI) in the subsidiary. The NCI's share of the transfer would be recorded as a debit to "Transfer from general reserve" and a credit to "General reserve" (as the reserve is being decreased). Therefore, the correct answer is D, DR Transfer from general reserve.

During the Current Year, a Partly Owned Subsidiary Has Made