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:

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for financial reporting.

Earnings Per Share

A financial metric indicating the portion of a company's profit allocated to each outstanding share of common stock, measuring its profitability on a per-share basis.

IFRS

International Financial Reporting Standards, a set of global accounting guidelines for preparing financial statements.

GAAP

Stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting in the United States.