What is included in the acquisition consolidating workpaper elimination entry?

In consolidation accounting, when a parent company acquires a subsidiary, elimination entries are necessary to combine the financial statements appropriately. One of the critical steps is to eliminate the parent’s investment in the subsidiary to avoid double-counting assets. This involves crediting the "Investment in subsidiary" account on the parent’s books.

When consolidation occurs, the consolidated financials should reflect only the actual assets, liabilities, revenues, and expenses of the combined entities without the parent's investment from the subsidiary. Thus, by making an elimination entry that credits the "Investment in subsidiary," it reduces the amount reported on the parent’s balance sheet, ensuring that the consolidated financial statements present the true financial position of the combined entity.

The other options, while related to different aspects of consolidation or accounting, either do not directly pertain to the elimination of the investment or misrepresent the nature of the entries required for consolidation.