What portion of the balances of subsidiary stockholders' equity accounts are eliminated in preparing the consolidated balance sheet?
A)Common stock
B)Additional paid-in capital
C)Retained Earnings
D)All of the balances are eliminated

Question

Quizplus · Accepted Answer

All of the balances in subsidiary stockholders' equity accounts are eliminated in preparing the consolidated balance sheet. This is because the purpose of consolidating the financial statements is to present the financial information of the parent company and its subsidiaries as if they were a single entity. Therefore, the balances of the subsidiary's stockholders' equity accounts need to be eliminated to avoid double counting and to accurately reflect the overall financial position of the consolidated entity.

What Portion of the Balances of Subsidiary Stockholders' Equity Accounts