The following is a listing of possible sets of financial statements:
I.$\quad$Consolidated financial statements of parent entities (those with subsidiaries) - uses consolidation.
II.$\quad$Separate financial statements of parent entities (single entity financial statements that report on the parent entity alone).
III.$\quad$Financial statements of entities that are not parents that apply equity accounting to investments in associates and jointly-controlled entities (single entity financial statements).
IV.$\quad$Separate financial statements of entities that are not parents that have investments in associates and jointly-controlled entities (single entity financial statements) - equity accounting not applied.
V.$\quad$Financial statements of an entity that is not a parent and does not have investments in jointly controlled entities.Neither equity accounting nor consolidation applied.
-Which of the following sets of financial statement report on the entity using the same reporting rules?
A)I, III and V
B)II, IV and V
C)I and II
D)All of I to V

Question

Quizplus · Accepted Answer

Option II, IV and V all relate to single entity financial statements. Therefore, they all report on the entity using the same reporting rules. Option I relates to consolidated financial statements which may require adjustments to be made to the financial statements of the subsidiaries before they can be consolidated, therefore report on the entity using different reporting rules. Option III relates to financial statements of entities that apply equity accounting to investments in associates and jointly-controlled entities, and this is a different basis of accounting from single entity financial statements, therefore report on the entity using different reporting rules. So, only option B satisfies the condition of reporting on the entity using the same reporting rules.

The Following Is a Listing of Possible Sets of Financial \quad

The Following Is a Listing of Possible Sets of Financial $\quad$