When a Large Corporation Purchases a New Business Which Is

question 213

True/False

When a large corporation purchases a new business which is included in consolidated statements for the year,it is not a change in a reporting entity,and it is handled prospectively.

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Definitions:

Accounting Period

A specific period of time used for financial reporting purposes, usually a quarter or a year, to measure business activities and prepare financial statements.

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, ensuring that total debits match total credits.

Chart of Accounts

A systematic listing of all accounts used by an organization, categorized to facilitate financial reporting and bookkeeping.

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting in the U.S.