The consolidation process consists of all the following except:
A)Combining the financial statements of two or more legally separate companies.
B)Eliminating intercompany transactions and holdings.
C)Closing the individual subsidiary's revenue and expense accounts into the parent's retained earnings.
D)Combining the accounts of separate companies,creating a single set of financial statements.

Question

Quizplus · Accepted Answer

The consolidation process includes combining the financial statements of two or more legally separate companies, eliminating intercompany transactions and holdings, and combining the accounts of separate companies to create a single set of financial statements. However, closing the individual subsidiary's revenue and expense accounts into the parent's retained earnings is not a part of the consolidation process. Instead, the subsidiary's net income is added to the parent's net income in the consolidation process.

The Consolidation Process Consists of All the Following Except