The Following Is a Listing of Possible Sets of Financial $\quad$

question 22

Multiple Choice

The following is a listing of possible sets of financial statements:
I. $\quad$ Consolidated financial statements of parent entities (those with subsidiaries) - uses consolidation.
II. $\quad$ Separate financial statements of parent entities (single entity financial statements that report on the parent entity alone) .
III. $\quad$ Financial statements of entities that are not parents that apply equity accounting to investments in associates and jointly-controlled entities (single entity financial statements) .
IV. $\quad$ Separate financial statements of entities that are not parents that have investments in associates and jointly-controlled entities (single entity financial statements) - equity accounting not applied.
V. $\quad$ Financial statements of an entity that is not a parent and does not have investments in jointly controlled entities.Neither equity accounting nor consolidation applied.
-Which of the following best reflects the sets of financial statements that under the Corporations Act must be included in the financial report of a small proprietary company:

• A)II plus either I or III
• B)I and II, or III and IV, or V
• C)Only I or III
• D)none of I to V

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Definitions:

Duty Of Care

An obligation to ensure the safety or well-being of others through a reasonable level of attention and caution.

Business Judgment Rule

A legal principle that protects company directors and officers from liability for decisions made in good faith and believed to be in the best interest of the company.

Indemnified

Protected against financial loss or compensated for loss or damage, often through insurance or indemnity clauses in contracts.

Litigation

The legal process of resolving disputes or claims between parties in court.