Where are the consolidating adjustments recorded?
A)Only on the consolidated financial statements.
B)In the general journal of both the parent company and on the consolidated financial statements.
C)In the general journal of both the parent and subsidiary companies and on the consolidated financial statements.
D)In the general journal of both the parent and subsidiary companies.

Question

Quizplus · Accepted Answer

Consolidating adjustments are recorded only on the consolidated financial statements to eliminate intercompany transactions and balances, ensuring that the consolidated financial statements present the financial position and results of operations of the parent and its subsidiaries as if they were a single economic entity. They are not recorded in the general journals of the parent or subsidiary companies.

Where Are the Consolidating Adjustments Recorded