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1. Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination? a. Initial value

1. Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination? a. Initial value or book value b. Initial value, lower-of-cost-or-market-value or equity c. Initial value, equity or partial equity d. Initial value, equity or book value e. Initial value, lower-of-cost-or-market-value or partial equity. 2. Which one of the following accounts would not appear on the consolidated financial statements at the end of the first fiscal period of the combination? a. Goodwill b. Equipment c. Investment in subsidiary d. Common stock e. Additional paid-in capital 3. Under the partial equity method, the parent recognizes income when a. Dividends are received from the investee b. Dividends are declared by the investee c. The related expense has been incurred d. The related contract is signed by the subsidiary e. It is earned by the subsidiary 4. Under the initial value method, when accounting for an investment in a subsidiary a. Dividends received by the subsidiary decrease the investment account b. The investment account is adjusted to fair value at year-end c. Income reported by the subsidiary increases the investment account d. The investment account remains at initial value e. Dividends received are ignored

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