Preparation of Consolidated Financial Statements When a Parent-Subsidiary Relationship Exists

question 24

Multiple Choice

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of

• A) the economic entity assumption.
• B) the matching principle.
• C) comparability.
• D) reliability.

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Definitions:

Chapter 13

A bankruptcy code provision allowing individuals with a regular income to develop a plan to repay all or part of their debts under court supervision.

Future Income

Expected earnings or revenue of an individual or entity in coming periods.

Full Payment

The complete settlement of an amount due, whether it be a debt, service fee, or purchase price.

Discharge

The act of fulfilling or settling an obligation or debt.