The Primary Goal Behind Consolidating Financial Statements of a Controlled

question 27

Multiple Choice

The primary goal behind consolidating financial statements of a controlled subsidiary is

• A)assuring that the subsidiary financial statements are the same under the temporal method or the current rate method.
• B)assuring that the individual nature of the subsidiary entity is not lost in the consolidation.
• C)representing the conversion of statements at the historical exchange rate.
• D)representing the company's underlying economic condition.

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Definitions:

Liquidation

The process of bringing a business to an end and distributing its assets to claimants.

Account Balances

The amounts of money present in or owed on a company's accounts at any given time.

Capital

Capital refers to the financial resources or assets that are used to fund operations, invest in the business, or cover expenses.

Profit and Loss

A financial statement that summarizes revenues, costs, and expenses incurred during a specific period, typically used to assess a company's financial performance.