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

Question

Quizplus · Accepted Answer

The justification for consolidated financial statements is that although in form the companies are separate legal entities, in substance they operate as a single economic entity. Consolidated financial statements present the results of operations and financial position of a group of companies as if they were a single entity.

Which of the Following Is the Best Theoretical Justification for Consolidated