In consolidating parent-founded subsidiaries, what account is used to offset the parent company's "Investment in Subsidiary" account?
A)Retained earnings
B)Goodwill
C)Paid-in-capital accounts
D)No offset is necessary

Question

Quizplus · Accepted Answer

When consolidating parent-founded subsidiaries, the parent company's "Investment in Subsidiary" account is offset by the subsidiary's "Paid-in-capital accounts". This is done to reflect the total equity of the subsidiary in the consolidated financial statements. Retained earnings and goodwill are not used for this purpose, and no offset is not necessary.

In Consolidating Parent-Founded Subsidiaries, What Account Is Used to Offset