Under Which of the Following Consolidation Theories Would the Elimination

question 19

Multiple Choice

Under which of the following Consolidation Theories would the elimination of only the Parent's share of any intercompany profits be required for the preparation of consolidated financial statements?

• A) The Ownership Theory.
• B) The Entity Theory.
• C) The Proprietary Theory.
• D)The Parent Company Theory.

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Definitions:

Just World

The belief that the world is fundamentally fair and individuals get what they deserve.

Group Polarisation

The tendency for a group to make decisions that are more extreme than the initial inclination of its members.

Intergroup Attribution

Process of assigning the cause of one’s own or others’ behaviour to group membership.

Ultimate Attribution Error

A cognitive bias where people attribute the positive behaviors of their own group to stable, internal characteristics and negative behaviors of out-groups to their inherent characteristics.