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LE CHOICE - THEORY PROBLEM 2: 1. For external reporting, the individual financial statements of the home office and the branch are combined a. by using complex consolidation procedures. b. by recognizing the home office's own assets, liabilities, income and expenses plus its share in the branch's assets, liabilities, income and expenses. c. by adding together similar items of assets, liabilities, income and expenses. d. by adding together similar items of assets, liabilities, income and expenses and eliminating reciprocal accounts. 2. A credit memo received from the branch is recorded by the home office as

LE CHOICE - THEORY PROBLEM 2: 1. For external reporting, the individual financial statements of the home office and the branch are combined a. by using complex consolidation procedures. b. by recognizing the home office's own assets, liabilities, income and expenses plus its share in the branch's assets, liabilities, income and expenses. c. by adding together similar items of assets, liabilities, income and expenses. d. by adding together similar items of assets, liabilities, income and expenses and eliminating reciprocal accounts. 2. A credit memo received from the branch is recorded by the home office as

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM 2: MULTIPLE CHOICE - THEORY 1. For external reporting, the individual financial statements of the home office and the branch are combined a. by using complex consolidation procedures. b. by recognizing the home office's own assets, liabilities, income and expenses plus its share in the branch's assets, liabilities, income and expenses. c. by adding together similar items of assets, liabilities, income and expenses. d. by adding together similar items of assets, liabilities, income and expenses 'and eliminating reciprocal accounts. 2. A credit memo received from the branch is recorded by the home office as a. Credit to home office account b. Credit to allocated expense Credit to investment account С. d. Debit to investment account 3. - The freight on shipment of inventories from the home office to the branch that is paid by the branch is recorded by the home office as c. Credit to investment account. a. Debit to freight-in. b. Credit to freight-in. d. Not recorded 4. A cash remittance from the branch to the home office is recorded by the home office as a. Debit to investment account. b. Credit to cash. c. Debit to home office. d. Credit to investment account. *. Shipments of inventory to the branch may be billed at other uian cost. When billing prices are above cost, the unrealized mark-up is initially recorded by the home office a, in an "allowance" account. . as a credit to investment in branch account. as an addition to the cost of "shipments to branch." С. d. a and c
Transcribed Image Text:PROBLEM 2: MULTIPLE CHOICE - THEORY 1. For external reporting, the individual financial statements of the home office and the branch are combined a. by using complex consolidation procedures. b. by recognizing the home office's own assets, liabilities, income and expenses plus its share in the branch's assets, liabilities, income and expenses. c. by adding together similar items of assets, liabilities, income and expenses. d. by adding together similar items of assets, liabilities, income and expenses 'and eliminating reciprocal accounts. 2. A credit memo received from the branch is recorded by the home office as a. Credit to home office account b. Credit to allocated expense Credit to investment account С. d. Debit to investment account 3. - The freight on shipment of inventories from the home office to the branch that is paid by the branch is recorded by the home office as c. Credit to investment account. a. Debit to freight-in. b. Credit to freight-in. d. Not recorded 4. A cash remittance from the branch to the home office is recorded by the home office as a. Debit to investment account. b. Credit to cash. c. Debit to home office. d. Credit to investment account. *. Shipments of inventory to the branch may be billed at other uian cost. When billing prices are above cost, the unrealized mark-up is initially recorded by the home office a, in an "allowance" account. . as a credit to investment in branch account. as an addition to the cost of "shipments to branch." С. d. a and c
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