Which of the following consolidation concepts are described correctly?
A) The entity concept requires the inclusion of all the parent entity assets and the proportionate share of the assets and liabilities of the subsidiaries where the proportion is based on the direct ownership of the capital of the subsidiary by parent companies within the group.
B) The proprietary concept includes all the assets and liabilities of the parent company and subsidiaries as assets and liabilities of the group. Minority interest is treated as a liability of the group.
C) The parent-entity concept includes all assets and liabilities of the parent and its subsidiaries in the consolidated accounts. The minority interest is treated as a liability of the group.
D) The proprietary concept includes all the assets and liabilities of the parent company and subsidiaries as assets and liabilities of the group. Minority interest is treated as a liability of the group; the parent-entity concept includes all assets and liabilities of the parent and its subsidiaries in the consolidated accounts. The minority interest is treated as a liability of the group.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The description for the parent-entity concept is correct in this choice, including the inclusion of all assets and liabilities of the parent and its subsidiaries in the consolidated accounts and treating minority interest as a liability of the group. The descriptions in the other choices either include incorrect information or combine multiple consolidation concepts in a confusing way.

Which of the Following Consolidation Concepts Are Described Correctly