The Process of Preparing Consolidated Financial Statements Requires That

question 10

Multiple Choice

The process of preparing consolidated financial statements requires that:

• A) no adjustments be made to the individual financial statements or ledger accounts of the entities in the group.
• B) adjusting journal entries are recorded in the ledger accounts of the subsidiaries only.
• C) accruals of expenses and revenues are recorded directly into the retained earnings account of the parent entity.
• D) adjusting journal entries are recorded in the ledger accounts of the parent only.