When Group Members Do Not Apply the Same Accounting Methods,the

question 47

Multiple Choice

When group members do not apply the same accounting methods,the consolidation process requires which of the following to be done?

• A) All group members must change their accounting policies to be consistent.
• B) Adjustments must be made on consolidation to remove the impacts of the different policies.
• C) Two sets of consolidated accounts need to be presenteD. the first done on the basis of the inconsistent policies; the second done after the subsidiaries have adjusted their policies in line with the parent.
• D) A choice is to be made by the parent's management between any of the three other options listed.
• E) Nothing needs to be done.

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Definitions:

Treasury Bonds

Long-term government securities issued by the U.S. Department of the Treasury, with a maturity period typically extending beyond ten years, offering periodic interest payments and repaying the principal at maturity.

Bid Price

The maximum price that a buyer is willing to pay for a security.

Ask Price

The price at which a seller is willing to sell a security or asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specified time.