When Preparing a Consolidated Income Statement

question 65

Multiple Choice

When preparing a consolidated income statement,

• A)only the revenues and expenses of the parent company are presented.
• B)the income from partially owned subsidiaries is excluded.
• C)all revenue and expense transactions between the parent and subsidiaries must be eliminated.
• D)intercompany transactions between affiliated companies do not have to be eliminated.

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Definitions:

Formula

A mathematical relationship or rule expressed in symbols.

License

A legal permission granted by competent authority to engage in an activity or use a property that would be illegal without such permission.

Trade Name

A business's official name under which it operates and is known to the public, distinct from its legal registered name.

Sole Proprietor

An individual who owns and operates a business alone, without forming a corporation or partnership, bearing unlimited liability.