When a parent uses the equity method throughout the year to account for investment in a subsidiary,which of the following statements is false before making adjustments on the consolidated worksheet?

Question

Quizplus · Accepted Answer

Before making adjustments on the consolidated worksheet, the parent company's total assets will not equal the consolidated total assets because the subsidiary's assets are not yet included. Therefore, statement C is false. The other statements are all true under the equity method. However, adjustments may need to be made on the consolidated worksheet to ensure they continue to be true after consolidation.

When a Parent Uses the Equity Method Throughout the Year