Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the comparability...
Preparation of consolidated financial statements when a
parent-subsidiary relationship exists is an example of the
comparability characteristic.
economic entity assumption.
neutrality characteristic.
relevance characteristic.
Homework Answers
Solution:
Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the "Economic entity assumption"
Hence 2nd option is correct.
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Preparation of consolidated financial statements when a
parent-subsidiary relationship exists is an example of the
comparability...
6. Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the...
6. Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the Select one: a. relevance characteristic b. comparability characteristic c. economic entity d. neutrality characteristic 7. Measurement uncertainty can affect.... Select one: a, relevance characteristic b. faithful representation and relevance characteristic c. understandability characteristic d. faithful representation characteristic 8. Erin Company applies the same accounting treatment to similar events from period to period. Erin Company is exhibiting which of the following qualities as described by...
1. The preparation of consolidated financial statements is useful to a. only the subsidiary company. b....
1. The preparation of consolidated financial statements is useful to a. only the subsidiary company. b. creditors of the subsidiary company. c. only the parent company. d. both the parent and the subsidiary company. 2.. The account Unrealized Loss—Income is reported a. as a contra account in the stockholders' equity section of the balance sheet. b. in the other expenses and losses section of the income statement. c. in the operating section of the income statement. d. as a contra...
In regard to preparing consolidated financial statements for a subsidiary and parent company, when considering the...
In regard to preparing consolidated financial statements for a subsidiary and parent company, when considering the amount of inventory to defer or recognize in an upstream or downstream sale, does the percentage of the amount still in inventory at the end of each period become a factor? If so, in what respect?
When the parent acquires 51% of a subsidiary U.S. corporation, the subsidiary can join the consolidated...
When the parent acquires 51% of a subsidiary U.S. corporation, the subsidiary can join the consolidated financial statements and the consolidated tax return of the parent. True or False?
The two alternative views of consolidated financial statements are the parent company concept and the economic...
The two alternative views of consolidated financial statements are the parent company concept and the economic entity concept. Briefly explain the differences between the concepts.
Inferring consolidation entries from consolidated financial statements—Cost method Assume a parent company acquired a subsidiary on...
Inferring consolidation entries from consolidated financial statements—Cost method Assume a parent company acquired a subsidiary on January 1, 2012. The purchase price was $1,312,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Property, plant and equipment (PPE), net $300,000 20 years Patent 432,000 12 years Goodwill 580,000 Indefinite $1,312,000 The parent company uses the cost method of...
1) Which of the following statements is not true with respect to consolidated financial statements? A)...
1) Which of the following statements is not true with respect to consolidated financial statements? A) Consolidated financial statements should be prepared using uniform accounting policies. B) Consolidated statements should include the consolidated cash flow statement. C) Investment in an associate company is accounted for using the equity method of accounting. D) During a financial year if a parent company loses ‘control’ of a subsidiary company, the consolidated statement of comprehensive income should not include the profit or loss of...
1. A company acquires a subsidiary and will prepare consolidated financial statements for extemal reporting purposes....
1. A company acquires a subsidiary and will prepare consolidated financial statements for extemal reporting purposes. For internal reporting purposes, the company has decided to apply the initial value method, Why might the company have made this decision? a. It is a relatively easy method to apply. 5. Operating results appearing on the parent's financial records rellect consolidated totals. c. GAAP now requires the use of this particular method for internal reporting purposes. d. Consolidation is not required when the...
A subsidiary issues bonds. The parent can then acquire the bonds either directly from the subsidiary...
A subsidiary issues bonds. The parent can then acquire the bonds either directly from the subsidiary or from a nonaffiliate that had originally acquired the subsidiary's bonds. a) Discuss the parent's accounting as it relates to the preparation of consolidated financial statements, for their acquisition of the bonds: 1. from the nonaffiliate. 2. directly from the subsidiary. b) Why does it matter who the bonds are acquired from?
Discussion: Consolidated Financial Statements Briefly discuss the entity theory and the parent company theory of consolidations...
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The two alternative views of consolidated financial statements are the parent company concept and the economic entity concept. Briefly explain the differences between the concepts.
1. A company acquires a subsidiary and will prepare consolidated financial statements for extemal reporting purposes. For internal reporting purposes, the company has decided to apply the initial value method, Why might the company have made this decision? a. It is a relatively easy method to apply. 5. Operating results appearing on the parent's financial records rellect consolidated totals. c. GAAP now requires the use of this particular method for internal reporting purposes. d. Consolidation is not required when the...
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