In the preparation of consolidated financial statements,which of the following intercompany transactions must be eliminated as part of the preparation of the consolidation working papers?
A)All revenues,expenses,gains,losses,receivables,and payables
B)All revenues,expenses,gains,and losses but not receivables and payables
C)Receivables and payables but not revenues,expenses,gains,and losses
D)Only sales revenue and cost of goods sold

Question

Quizplus · Accepted Answer

All intercompany transactions must be eliminated in the preparation of consolidated financial statements, including revenues, expenses, gains, losses, receivables, and payables. This is done to avoid double-counting of transactions and to present a true and fair view of the group's financial position and performance. Option B, C, and D eliminate some but not all intercompany transactions, which is not correct. Therefore, option A is the best choice.

In the Preparation of Consolidated Financial Statements,which of the Following