When preparing the consolidation workpaper for a company and its controlled subsidiary,which of the following would be used for the entities being consolidated?
A)Post-closing trial balances
B)Adjusted trial balances
C)Unadjusted trial balances
D)The adjusted trial balance for the parent and the unadjusted trial balance for all controlled subsidiaries

Question

Quizplus · Accepted Answer

Adjusted trial balances would be used for both the parent company and its controlled subsidiary as they reflect all necessary adjustments and are the most accurate representation of the financial position and performance of the entities being consolidated. Post-closing trial balances and unadjusted trial balances do not reflect adjustments and are therefore not appropriate for use in consolidation workpapers. Option D is not necessary as the use of adjusted trial balances for all entities being consolidated is sufficient.

When Preparing the Consolidation Workpaper for a Company and Its