Under the economic entity concept, consolidated financial statements are intended primarily for the benefit of the:
A) stockholders of the parent company.
B) creditors of the parent company.
C) minority stockholders.
D) all of these.

Question

Quizplus · Accepted Answer

The economic entity concept treats the parent company and its subsidiaries as a single entity, so consolidated financial statements are designed to provide a comprehensive view of the financial status and performance of the entire group. This information is beneficial for stockholders of the parent company, creditors of the parent company, and minority stockholders, as it helps all these stakeholders make informed decisions regarding their investment or lending.

Under the Economic Entity Concept, Consolidated Financial Statements Are Intended