1. Under what circumstances would a parent cease consolidation of a subsidiary? Please explain.
2. How do Other Comprehensive Income (OCI) items reported by a subsidiary affect the consolidated financial statements? What portion of OCI reported by the subsidiary is included as accruing to the parent? To the NCI?
3. How do unrealized intercompany profits on the intercompany downstream sale of inventory affect the computation of consolidated net income and income to the controlling interest? How are they affected on an upstream sale?
4. Whymustintercompanyinventorytransfersbeeliminatedintheconsolidationprocess?
6. What is the basic idea underlying the preparation of consolidated financial statements? To whom are they likely to be the most useful?
7. What is a special purpose entity? How have they generally been used?
8. What is meant by Indirect control. Give an example.
9. If a company has control, but less-than majority, must they consolidate? Please explain why or why not.
10. What is the difference between Combined Financial Statements and Consolidated Financial Statements?
11. How is differential treated by an investor in computing income from an investee under the following reporting methods?
12. Cost method -
13. Equity method -
14. Under what circumstances would there be negative differential?
15. What does the term push-down accounting mean? Under what circumstances is push-down accounting considered appropriate?

What is the basic idea underlying the preparation of consolidated financial statements? To whom are they likely to be the most useful?

What is a special purpose entity? How have they generally been used?

What is meant by Indirect control. Give an example.

If a company has control, but less-than majority, must they consolidate? Please explain why or why not.

What is the difference between Combined Financial Statements and Consolidated Financial Statements?

How is differential treated by an investor in computing income from an investee under the following reporting methods?

1. Cost method -
2. Equity method -

Under what circumstances would there be negative differential?

What does the term push-down accounting mean? Under what circumstances is push-down accounting considered appropriate?

1. Describe the three legal forms a business combination might take.
2. What is a noncontrolling interest?
3. Define the following:
   1. Goodwill -
   2. Differential -
   3. Bargain Purchase -
4. How is Goodwill computed under the Acquisition method?
5. Briefly differentiate the following. Be sure to describe when each method is appropriate.
   1. Cost method -
   2. Equity method -
   3. Fair Value method -
   4. Consolidation -
   5. How does an elimination entry differ from an adjusting entry?