Ask Question
BusinessBusiness
27 February, 03:04

What is the best theoretical justification for consolidated financial statements?

+5
Answers (1)
  1. 27 February, 03:29
    0
    The options are given below:

    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

    The correct option is B.

    Explanation:

    Consolidated financial statements refer to the financial statements of an entity that has multiple divisions or subsidiaries. Therefore, companies often use the word consolidated loosely when carrying out financial statement reporting in a manner which refers to the overall reporting of their whole business collectively.

    The Financial Accounting Standards Board defines consolidated financial statement reporting as reporting of an entity which possesses the structure of a parent company and subsidiaries.

    The reason therefore, why the consolidated financial statements is used, is to present, basically for the benefit of the owners, stakeholders, and shareholders of the parent, the results of the financial position of the parent company and all its subsidiaries as if the consolidated group were a single economic entity.

    Hence, though the parent company and its subsidiaries operate separately, they are reported as one entity in the consolidated financial statements.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “What is the best theoretical justification for consolidated financial statements? ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Suppose that Zimbabwe has recently experienced an increase in its growth rate, although the total quantity of inputs in the country has remained unchanged. This growth may have been caused by Choose one or more: A. a random increase in demand. B.
Answers (1)
If a firm is evaluating two possible projects, both of which require the use of the same production facilities, and taking one project means that we cannot take the other, these projects would be considered ___. A. Mutually exclusive B.
Answers (2)
The general ledger is a book of original entry. True or false?
Answers (1)
How quality perfomance of marketing function can contribute a successful business
Answers (1)
Which of the following accurately describes the difference between a change in supply and a change in quantity supplied? a.
Answers (1)
New Questions in Business
If Gerry makes a deposit of $1,500 at the end of each quarter for five years, how much will he have at the end of the five years assuming a 12% annual return and quarterly compounding?
Answers (1)
Explain how globalization influence management
Answers (1)
The following information relating to a company's overhead costs is available. Col1 = Actual total variable overhead, Actual total fixed overhead, Budgeted variable overhead rate per machine hour, Budgeted total fixed overhead, Budgeted machine
Answers (1)
A homemaker enters the work force, taking a job that will pay $40,000 over the year. the homemaker must pay $16,000 over the year for professional child care services. how much does gdp change?
Answers (1)
The law of supply states that as the price of a good rises, the quantity supplied of that good disappears. decreases. remains the same. increases.
Answers (1)
Home » Business » What is the best theoretical justification for consolidated financial statements?
Sign Up Forgot Password?