Which of the following statements is incorrect?
A)the consolidation process does not involve entries in the books of the parent entity
B)the consolidation process does not involve entries in the books of any of the subsidiaries being consolidated
C)the consolidation process involves entries being made in the books of the parent entity and each of the subsidiaries being consolidated
D)no consolidation entries are carried forward in the accounts of any of the individual legal entities making up the group

Question

Quizplus · Accepted Answer

The consolidation process involves combining the financial statements of the parent company and its subsidiaries into one set of financial statements for the group as a whole, without making entries in the individual books of the parent or the subsidiaries. Therefore, statement C is incorrect as it suggests that entries are made in the books of both the parent entity and the subsidiaries, which is not the case in consolidation.

Which of the Following Statements Is Incorrect