Under the partial equity method, the entry to eliminate subsidiary income and dividends includes a debit to:
A) Dividend Income.
B) Dividends Declared - S Company.
C) Equity in Subsidiary Income.
D) Retained Earnings - S Company.

Question

Quizplus · Accepted Answer

Under the partial equity method, the entry to eliminate subsidiary income includes a debit to Equity in Subsidiary Income. This adjustment is made to avoid double counting the income from the subsidiary that has already been recognized.

Under the Partial Equity Method, the Entry to Eliminate Subsidiary