The account "Noncontrolling Interests" as reported on a balance sheet shows ________.
A) the parent company's interest in a subsidiary
B) the subsidiary's interest in a parent company
C) the outside stockholders' interest in a subsidiary
D) the outside stockholders' interest in a parent company

Question

Quizplus · Accepted Answer

Noncontrolling interests, also known as minority interests, represent the outside stockholders' ownership in a subsidiary that is not wholly owned by the parent company. Therefore, choice C is the correct answer. Choices A and B refer to the parent company's and subsidiary's ownership in each other, respectively, but not to noncontrolling interests. Choice D refers to the outside stockholders' ownership in the parent company, which is not represented by the Noncontrolling Interests account on the balance sheet.

The Account "Noncontrolling Interests" as Reported on a Balance Sheet