When a Parent Company and a Subsidiary Company Prepare a Set

question 36

Multiple Choice

When a parent company and a subsidiary company prepare a set of consolidated financial statements, the intercompany transactions must be:

• A)combined with the transactions involving entities outside the consolidated entity.
• B)eliminated before consolidation.
• C)reported separately on the consolidated statements.
• D)explained in a footnote to the consolidated statements.

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Definitions:

Two-Dimensional Array

A type of data structure that stores elements in a grid or matrix format, allowing for indexing by two coordinates, row and column.

Two-Dimensional Arrays

Data structures that organize data in a grid-like format, consisting of rows and columns, allowing for storage of data in a tabular form.

Three-Dimensional Array

An array that includes three levels of indices and can be visualized as an array of arrays of arrays.

Second Subscript

In multidimensional arrays, the second subscript refers to the index within the second dimension of the array.