Choose the correct. Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)

Choose the correct. Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)
Which of the following statements is incorrect concerning the preparation of consolidated financial statements? * A. Consolidated financial statem ents shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. b. The financial statements of the parent and its subsidiaries shall be consolidated on a line by line basis by adding together like items of assets, liabilities, equity, income and expenses. c. Intragroup balances, transactions, income and expenses shall be eliminated in full. d. When the reporting dates of the parent and a subsidiary are different, the difference shall be no more than six months.
Which of the following statements regarding IFRS consolidated financial statements is/are correct: (i) An entity that has equity investments in one or more other entities is required to present consolidated financial statements (ii) A parent whose debt or equity instruments are not traded in a public market is not required to present consolidated financial statements (iii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity
Which of the following are considered separate financial statements? a. Those presented by a parent in addition to the consolidated financial statements, in compliance with a regulatory requirement. b. Those presented by an entity, which does not have a subsidiary or associate and is not a venturer in jointly controlled entity. c. Those presented by an entity which does not have any equity interest in another entity. d. Financial statements of an entity that applies the equity method.
Which of the following statements is not correct in relation to consolidation accounting key terms? Select one alternative: Consolidated financial statements are financial statements of a group of entities presented as if that group was acting as a single economic entity. A parent is an entity that has more than one subsidiary. A subsidiary is an entity that is controlled by another entity. A group comprises a parent and all of its subsidiaries.
Explain why transactions between members of a consolidated firm should not be reflected in the consolidated financial statements.
Consolidated financial statements are required in which ofthe following situations?a. Only when a company can exert significant influenceover another company.b. Only when a company has a passive investment inanother company.c. Only when a parent company can exercise control overits subsidiary.d. None of the above.
Consolidated financial statements are designed to provide: a. informative information to all shareholders. b. the results of operations, cash flow, and the balance sheet in an understandable and informative manner for creditors. c. the results of operations, cash flow, and the balance sheet as if the parent and subsidiary were a single entity. d. subsidiary information for the subsidiary shareholders.
When we are preparing consolidated financial statements, will the financial statements of the parent entity, or the subsidiary companies, as at the beginning of the financial period reflect prior consolidation adjustments? Why?
The preparation of consolidated financial statements: Select one alternative: does not obviate the need for separate entities to prepare and release their own separate financial statements and should be done in accordance with IFRS 10 will eliminate the result derived from operations with parties external to the group of entities highlights income derived as a result of transactions within the group obviates the need for separate entities to prepare and release their own separate financial statements
Which of the following is NOT a required disclosure for any entity that holds an interest in a VIE? a.The significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE b.How the entity's involvement involvement with the VIE is perceived by Wall Street analysts c.The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities. d. The nature of, and changes in, the risks associated with an enterprise’s involvement with the vie
an accounting change may result in financial statements that are actually those of a different reporting entity. Th change should be reported by restating the financial statements of all prior periods presented. Which of the following is not a change in the reporting entity? A. Presenting consolidated statements in place of statements of individual companies or accounting for a business combination using the pooling of interests methodB. Changing specific subsidiaries included in the group of companies for which consolidated financial statements are presented or changing the companees included in combined financial statementsC. The creation, cessation, purchase, or disposition of a subsidiary or other business unitD. A change among the cost, equity, or consolidation methods of accounting for subsidiaries and investments