Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the ________.
A) monetary unit assumption
B) periodicity assumption
C) economic entity concept
D) common sense assumption

Question

Quizplus · Accepted Answer

The economic entity concept requires that the activities of a parent and its subsidiaries be combined for financial reporting purposes, reflecting the entire economic entity.

Preparation of Consolidated Financial Statements When a Parent-Subsidiary Relationship Exists