The Major Difference Between the Financial Statements of a Company

question 44

Multiple Choice

The major difference between the financial statements of a company and those of a sole trader or partnership is with:

• A) assets.
• B) liabilities.
• C) equity.
• D) liabilities and assets.

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Definitions:

Parent Company

A company that controls or owns more than half of another company's voting stock, making the latter a subsidiary.

Financial Statements

These are formal records of the financial activities and position of a business, person, or other entity, presenting the results of operations and financial condition.

Journal Entry

A record in the books of accounts that documents a business transaction.

Acquisition

The process of obtaining control of another company either through purchase or merger.