When Preparing Consolidation Adjustment Entries to Affect a Consolidation of a Multiple

question 22

Multiple Choice

When preparing consolidation adjustment entries to affect a consolidation of a multiple subsidiary structure, intragroup transactions:

• A) are not eliminated.
• B) are eliminated in full.
• C) are partially eliminated to the extent of the ownership interest of the parent entity to each transaction.
• D) are ignored as it is impractical to attempt to determine the size of the ownership interest relating to each transaction.

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Definitions:

Irrigation Systems

Networks of tubes, pumps, and canals used to transport water to agricultural crops to enhance growth when rainfall is not sufficient.

Power Generators

Machines or devices that transform various forms of energy into electrical power.

Capital Formation

The process of building up the physical and financial assets of a country or region for the purpose of increasing its capacity for production.

Economic Growth

An increase in the amount of goods and services produced per head of the population over a period of time.