Elimination entries avoid double-counting assets,liabilities and stockholders' equity on the consolidated financial statements.

Question

Quizplus · Accepted Answer

Elimination entries are used to remove intercompany transactions and balances from consolidated financial statements in order to avoid double-counting of assets, liabilities, and stockholders' equity. By eliminating these transactions and balances, the consolidated financial statements provide a more accurate picture of the financial position and performance of the consolidated entity. Therefore, the statement is true.

Elimination Entries Avoid Double-Counting Assets,liabilities and Stockholders' Equity on the Consolidated