When preparing consolidated financial statements, the result of the elimination process generally is the

Question

Quizplus · Accepted Answer

CThe elimination process in preparing consolidated financial statements aims to remove the effects of intercompany transactions and to present the financial position and results of operations of the parent and its subsidiaries as if they were a single economic entity. This involves B) presenting only the transactions between the consolidated entity and external parties, to avoid double counting of revenues, expenses, and balances that occur in intercompany dealings. It also involves C) replacing the investment account on the parent's books and the subsidiary's equity accounts with the parent's share of the subsidiary's individual assets and liabilities, to reflect the economic reality of the group as a single entity.

When Preparing Consolidated Financial Statements, the Result of the Elimination