Which of the Following Statements Regarding the Proprietary Concept of Consolidation

question 10

Multiple Choice

Which of the following statements regarding the proprietary concept of consolidation is FALSE?

• A)The proprietary concept is sometimes referred to as proportional consolidation or pro rata consolidation.
• B)The group consists of the assets and liabilities of the parent and the parent's proportional share of the assets and liabilities of the subsidiary.
• C)The consolidated financial statements include all the net assets of a subsidiary.
• D)As the NCI is outside the group, the NCI share of subsidiary equity is not disclosed.

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Definitions:

Inventory Turnover

A metric that measures the efficiency of a company in managing its stock of goods through the calculation of the cost of goods sold divided by average inventory.

Accounts Receivable Period

The average number of days it takes for a company to collect payment from its credit sales.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers for goods or services sold.

Inventory Period

The average time it takes for a company to sell through its inventory, calculated by dividing the total inventory by the cost of goods sold and then multiplying by 365 days.