Which Statement About the Differences Between Consolidation Methods Permitted Under

question 4

Multiple Choice

Which statement about the differences between consolidation methods permitted under US GAAP and IFRS is true?

• A) IFRS and US GAAP both require the use of the entity theory.
• B) IFRS and US GAAP both require the use of the parent company extension theory.
• C) IFRS permits either the entity theory or the parent company extension theory; US GAAP requires the entity theory.
• D) IFRS permits either the entity theory or the parent company extension theory; US GAAP requires the parent company extension theory.

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Definitions:

Veins

Blood vessels that carry blood towards the heart, as opposed to arteries which carry blood away from the heart.

Arteries

Arteries are the vessels responsible for transporting blood enriched with oxygen from the heart to the rest of the body.

Capillaries

The smallest blood vessels in the body, which facilitate the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and surrounding tissues.

Aorta

The largest artery in the human body, originating from the left ventricle of the heart and extending down to the abdomen, distributing oxygen-rich blood to all parts of the body.