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24 October, 07:04

Which of the subsidiary's account balances must always be eliminated?

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  1. 24 October, 07:30
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    The joint-stock company and the equity accounts of the affiliate owners must be eliminated.

    Explanation:

    In preparing the consolidated financial statements, the parent companies eliminate the effects of interstate transactions by introducing elimination, because the subsidiary's shares are wholly consolidated and none represents the claims of foreigners. The elimination entries allow the presentation of all account balances as if the parent company and its subsidiaries were one company.
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