When a Parent-Subsidiary Relation Exists, Consolidated Financial Statements Are Prepared

question 14

Multiple Choice

When a parent-subsidiary relation exists, consolidated financial statements are prepared in recognition of the accounting concept of:

• A) Reliability
• B) Materiality
• C) Legal entity
• D) Economic entity

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Definitions:

Geographically Disperse

Describes entities, such as employees or resources, that are spread out across a wide geographic area.

Organizational Context

The environment or setting in which a company or entity operates, including its culture, structure, and external influences.

Collective Responsibility

The principle or practice of holding a group collectively accountable for the actions and consequences of its members.

Commitment to Goals

A strong determination to achieve specified aims or objectives.