Under the equity method a parent company that has, Ask an Expert

Accounting

Under the equity method, a parent company that has guaranteed all of its subsidiary's debt would:

a. Discontinue applying the equity method when the subsidiary's retained earning becomes negative.

b. Discontinue applying the equity method when the subsidiary's equity becomes negative.

c. not discontinue applying the equity method regardless of the subsidiary's losses.

d. switch to the cost method when the subsidiary's equity becomes zero

e. None of the above

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9403925

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