A subsidiary's paid-in capital ledger accounts always are eliminated in the preparation of a consolidated balance sheet for the parent company and the subsidiary.

Question

Quizplus · Accepted Answer

In the preparation of a consolidated balance sheet, intercompany investments and equity accounts, including the subsidiary's paid-in capital ledger accounts, are eliminated to avoid double counting and to present the financial position of the parent and subsidiary as a single economic entity.

A Subsidiary's Paid-In Capital Ledger Accounts Always Are Eliminated in the Preparation