Answered: ‘The consolidation of financial…

Business

Accounting

‘The consolidation of financial statements hides rather than provides information.’ Discuss.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 6QE

See similar textbooks

Related questions

Q: Which one of the following statements is not correct regarding financial accounting and management…

A: Financial Accounting - This is a branch of accounting under which business transactions are recorded…

Q: adjusting entries so important for the truthfulness of the information presented in the financial…

Q: Statement 1: The primary responsibility for the preparation and presentation of the financial…

A: Statement 1 True, The preparation and presentation of entities financial statements are the…

Q: Which of the following is not an objective of the conceptual framework? O a. Provides guidance for…

A: A conceptual framework is a lucid arrangement of interrelated goals and fundamentals that can prompt…

Q: Statement 1: If financial information is to be useful, it must be relevant or faithfully represent…

A: Financial information is useful when it is relevant and represents faithfully what it purports to…

Q: Which of the following statements is not correct? Select your answer. Different users have different…

A: Statement 1 is correct as there are many users of financial statements and they have different uses…

Q: Which of the following types of information is not found in financial statements? * O Profits…

A: Financial Statements shows the financial performance and financial position of the company which…

Q: An accounting transaction may impact only a single financial statement or multiple financial…

A: The correct answer is True.

Q: Required: Discuss the proper accounting treatment of the above situation in accordance with i. MFRS…

A: Accounting standards can be defined as the general guidelines and policies being used by the…

Q: Which of the following is not an accounting assumption? Select one: a. Integrity. b. Economic…

Q: Verifiability of financial accounting information is synonymous with: a.) faithful representation…

A: Financial accounting standards board (FASB): This is the organization which creates, develops, and…

Q: 4. Why is an entity permitted to change an account policy? a. The change would allow the entity to…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Why is the going-concern assumption an important consid-eration in understanding financial…

Q: Choose only one answer. The term refers to the classification and aggregation on the face of the…

A: Financial statement means the trading and profit and loss account and balance sheet of the company…

Q: GAAP does not allow cash basis accounting to be used in external financial reports. True or…

A: GAAP gives the accounting rules and standards that are used to prepare the financial reports of an…

Q: Financial accounting is concerned with data gathering and compliance with established accounting…

A: Financial management and financial accounting are co related to each other.

Q: (b) “The Matching Principle is the essence of financial accounting, with significant implications…

A: The statement in which the revenues earned by the business, the expenses incurred during the period,…

Q: Which statement is incorrect? a. Notes to financial statements (F/S) provide narrative description…

A: statement is incorrect e. none of the above Statement is incorrect: c. Expenses encompasses both…

Q: In the process of applying the entity's accounting policies, management makes various judgments,'…

A: Solution Note : As per the Q&A guideline we are required to answer the first question only .…

Q: Financial accounting information is characterized by all ofthe following except:a. It is historical…

A: Financial accounting information will be information about a business element's exchanges. From…

Q: Identify the accounting assumption, accounting principle, or reporting constraint that mos…

A: Accounting principles are those rules, regulations and guidelines which are used by the accountants…

Q: To better understand the financial information, it must be classified and ____________. a. Relevant…

A: Introduction:- Every company prepare financial statements every financial year. which is very useful…

Q: Which is not a required component of a complete set of financial statements under PAS 1? A.…

A: According to the Philippine Accounting Standards, PAS 1 deals with the presentation of the financial…

Q: The financial statements are based on the most basic tool of accounting. True or false? Explain how?

A: Financial statements: Financial statements are condensed summary of transactions communicated in the…

Q: Why is continuity assumption,separate entity assumption and cost principle so important for…

A: Continuity means the assumption and principles will be continued to be followed every year so that…

Q: Choose the correct.Which of the following statements concerning U.S. GAAP is true?a. Does not…

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: Which one of the following is not related to financial statements? a-Profit & Loss Account…

A: Financial statements are referred as the records of the business operations and financial…

Q: (b) Change in accounting policy may have a material effect on the items of financial statements."…

A: Accounting policies are those rules, regulations and guidelines which needs to be followed at the…

Q: Which of the following is most appropriate for IFRS? a. Should disclose all the material information…

A: IFRS stands for International Financial Reporting Standards. It refers to the standard and rules, as…

Q: Which of the following is NOT TRUE about the basic and additional financial statements a) Revenues…

A: Financial statements are records of a corporation in written form that represents the financial data…

Q: Identify and discuss the limitations of financial statements

A: Limitations of financial statements- The financial statements contain only past data- The financial…

Q: The “matching” principle in accounting refers to: Group of answer choices d. None of the above a.…

A: The matching principle of accounting refers to that the expenses incurred while conducting the…

Q: The another interpretation of the accounting equation is Assets = Liabilities + Contributed Capital…

A: A basic acounting equation is Assets = Liabilities + Equity Equity refers not only contributed…

Q: Which sentence is incorrect? Select one: a. According to the GAAP in Accrual-Basis Accounting,…

A: As per cash basis of accounting, we should record the transaction only when corresponding cash is…

Q: What is the objective of financial reporting?

A: Answer: Option c.

Q: Which of the following is not correct about Going Concern? O a. The concept of going concern is an…

A: Going concern is an business assumption that business will continue to exist for the foreseeable…

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

100%

(b) ‘The consolidation of financial statements hides rather than provides information.’ Discuss.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Consolidate financial statement

VIEW

Answer

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Discuss, using practical example how to the absence of double entry principles will affect the preparation of financial statement ?
Financial accounting information is characterized by all ofthe following except:a. It is historical in nature.b. It sometimes results from inexact and approximatemeasures.c. It is factual, so it does not require judgment to prepare.d. It is enhanced by management’s explanation.
Which of the following is not an accounting assumption? Select one: a.Integrity. b.Economic entity. c. Going concern. d. Periodicity.
Which of the following types of information is not found in financial statements? *
Why is the going-concern assumption an important consid-eration in understanding financial statements?
Discuss, using practical example how to the presence of double entry principles affect the preparation of financial statement?
Which of the following does not accurately represent the accounting equation? A. B. C. D.
1. How to determine whether a company's assets have been overstated using only its financial statements? Provide concreate answers with examples
Choose the correct.Which of the following statements concerning U.S. GAAP is true?a. Does not require segment information to be reported in accordance with generally accepted accounting principles.b. Does not require a reconciliation of segment assets to consolidated assets.c. Requires geographic area information to be disclosed in interim financial statements.d. Requires disclosure of a major customer’s identity.
What is probably the greatest single reason conventional financial statements are inadequate for analysis? a. Accrual accounting b. Historical cost c. Matching rule d. Going concern concept
Identify and discuss the limitations of financial statements
As to why financial statements of the same size might be advantageous. How do they vary from standard financial statements in terms of how they're calculated?