Which of the Following Statements Is Incorrect

question 5

Multiple Choice

Which of the following statements is incorrect:

• A) consolidated profit arises only in relation to transactions with entities external to the group.
• B) consolidated assets are recorded at the cost to the legal entity that owns them.
• C) consolidated liabilities are obligations to entities external to the group.
• D) consolidated revenues are earned only from transactions with entities external to the group.

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Definitions:

Dissolution

The process of legally dissolving a corporation or partnership, effectively terminating its existence.

Winding Up

The process of closing a business, paying off creditors, and distributing any remaining assets to the owners or shareholders.

Liquidation

The process of converting a company's assets into cash to pay off creditors before ceasing operations or undergoing reorganization.

Fiduciaries

Individuals or organizations that are required to act in the best interest of another party, usually in a financial or trust-related capacity.