Which of the Following Statements Is Not Correct

question 3

Multiple Choice

Which of the following statements is not correct?

• A) A group comprises a parent and all of its subsidiaries.
• B) Consolidated financial statements are financial statements of a group of entities presented as if that group was acting as a single economic entity.
• C) A subsidiary is an entity that is controlled by another entity.
• D) A parent is an entity that has more than one subsidiary.
• E) None of the given answers; they are all correct statements.

---

Definitions:

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to individual units of production, based on estimated costs and activity levels.

Direct Labor-hours

The total hours of labor directly involved in producing goods, used as a measure for costing and operational efficiency.

Manufacturing Overhead

All manufacturing costs that are not directly related to the production of goods or services, such as factory rent, utilities, and equipment maintenance.

Predetermined Overhead Rate

A rate calculated before a cost period begins, used to allocate overhead costs to products based on a chosen activity base.