Which of the following regarding the preparation of Consolidated Financial Statement is correct?
A) Once the parent company prepares Consolidated Financial Statements, it no longer needs to prepare financial statements for its own activities.
B) Only the subsidiaries are required to prepare Financial Statements.
C) Consolidated Financial Statements are required by the Parent Company for reporting purposes only; each company must continue to prepare its own Financial Statements.
D) Consolidated Financial Statements are required only when both companies are publicly traded.

Question

Quizplus · Accepted Answer

Consolidated Financial Statements are prepared by the parent company for reporting purposes but each company (parent and subsidiaries) must still prepare their own individual financial statements. This is because Consolidated Financial Statements only provide an overview of the financial performance of the entire group and do not provide detailed information about the separate entities within the group. Therefore, each individual entity within the group must still prepare their own financial statements to provide more detailed information about their own financial performance.

Which of the Following Regarding the Preparation of Consolidated Financial