The adjustments included in the consolidation worksheet are:
I. pre-acquisition entries
II. business combination valuation entries
III. elimination of the effects of intragroup transactions
A) I, II and III
B) I and II only
C) I only
D) II only

Question

Quizplus · Accepted Answer

The consolidation worksheet includes all three adjustments, pre-acquisition entries, business combination valuation entries, and the elimination of the effects of intragroup transactions. Pre-acquisition entries adjust for any differences between the book value and the fair value of the subsidiary's assets and liabilities before the acquisition. Business combination valuation entries adjust for any goodwill or bargain purchase gains resulting from the acquisition. The elimination of the effects of intragroup transactions removes any transactions between the parent and the subsidiary, ensuring that only transactions with external parties are included in the consolidated financial statements.

The Adjustments Included in the Consolidation Worksheet Are