The following accounts were noted in reviewing the trial balance for Parent Co. and Subsidiary Corp.: Assets under Construction
Contracts Receivable
Billings on Construction in Progress
Earned Income on Long-Term Contracts
Contracts Payable
Which of these accounts do you expect to eliminate when producing Parent Co. consolidated financial statements?

Question

Quizplus · Accepted Answer

In consolidated financial statements, intercompany transactions and balances are eliminated. Contracts Receivable and Contracts Payable are likely intercompany accounts, while Billings on Construction in Progress and Earned Income on Long-Term Contracts may also involve intercompany transactions that need elimination.

The Following Accounts Were Noted in Reviewing the Trial Balance