Which One of the Following Assumptions or Principles Most Logically

question 39

Multiple Choice

Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?

• A) historical cost
• B) industry practices
• C) reporting entity
• D) materiality

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Definitions:

Gallbladder

A small, pear-shaped organ located beneath the liver, which stores and concentrates bile produced by the liver.

Bile

A digestive fluid produced by the liver and stored in the gallbladder, that aids in the digestion and absorption of fats in the small intestine.

Common Bile Duct

A duct in the digestive system that conveys bile from the liver and gallbladder to the duodenum.

Cystic Duct

A short duct that connects the gallbladder to the common bile duct, which then carries bile to the intestine.