When adding a new member that is an expense type under a parent that is income type, what is the resulting effect on consolidation to the parent?

When adding a new member that is an expense type under a parent that is income type, what is the resulting effect on consolidation to the parent?

• A. This setting will not affect additions or subtractions to the next parent
• B. Subtract amounts consolidated to the parent
• C. Add amounts consolidated to the parent
• D. You can't load data to this account

Answer: (B)

When consolidating up to a parent that represents income, the sign of the amounts coming from its children depends on the type of each child. An expense-type member is treated as a negative contributor in the consolidation. So adding an expense under an income parent will reduce the parent’s consolidated total. For example, if the income parent has 100 and you add an expense child of 20, the amount consolidated to the parent becomes 80. This behavior keeps revenues minus expenses reflected in the parent. The other options don’t fit because the system does perform this subtraction with expense-type children, and there isn’t a restriction preventing data loading to this structure.

When consolidating up to a parent that represents income, the sign of the amounts coming from its children depends on the type of each child. An expense-type member is treated as a negative contributor in the consolidation. So adding an expense under an income parent will reduce the parent’s consolidated total. For example, if the income parent has 100 and you add an expense child of 20, the amount consolidated to the parent becomes 80. This behavior keeps revenues minus expenses reflected in the parent. The other options don’t fit because the system does perform this subtraction with expense-type children, and there isn’t a restriction preventing data loading to this structure.