During the consolidation process, it may be necessary to make which of the following adjustments to the individual statements?
A) pre-acquisition entries only.
B) business combination valuation entries and pre-acquisition entries in the consolidation worksheet.
C) business combination valuation entries only.
D) business combination valuation entries and pre-acquisition entries in the individual journals of the parent and the subsidiaries.

Question

Quizplus · Accepted Answer

During the consolidation process, adjustments are made to combine the financial statements of the parent and the subsidiaries. These adjustments usually involve both pre-acquisition entries and business combination valuation entries. Therefore, the best choice is B, which includes both types of adjustments in the consolidation worksheet. The other options are not comprehensive enough to reflect the full consolidation process.

During the Consolidation Process, It May Be Necessary to Make