When preparing consolidated financial statements,eliminating entries are made to avoid double-counting ________.
A) assets only
B) liabilities only
C) assets, liabilities and stockholders' equity
D) none of the above

Question

Quizplus · Accepted Answer

Eliminating entries are made to remove any transactions between the parent company and subsidiary company in order to avoid double-counting of assets, liabilities, and stockholders' equity in the consolidated financial statements. Therefore, option C is the correct choice that includes all three categories.

When Preparing Consolidated Financial Statements,eliminating Entries Are Made to Avoid