Which of the following is not true of the consolidation process for a stock acquisition?
A)Journal entries for the elimination process are made to the parent's or subsidiary's books.
B)The investment account balance on the parent's books will be eliminated.
C)The balance sheets of two companies are combined into a single balance sheet.
D)The shareholder equity accounts of the subsidiary are eliminated.

Question

Which of the following is not true of the consolidation process for a stock acquisition?
A)​Journal entries for the elimination process are made to the parent's or subsidiary's books.
B)​The investment account balance on the parent's books will be eliminated.
C)​The balance sheets of two companies are combined into a single balance sheet.
D)​The shareholder equity accounts of the subsidiary are eliminated.

Quizplus · Accepted Answer

Journal entries for the elimination process are made only in the consolidation worksheet, not in the books of the parent or the subsidiary. This process is used to prepare consolidated financial statements without altering the individual books of the parent or subsidiary.

Which of the Following Is Not True of the Consolidation