Consolidated statements are prepared as if a company is organized as one entity, with the amounts allocated for subsidiaries reported in the investment accounts.

Question

Quizplus · Accepted Answer

Consolidated statements are prepared by combining the financial statements of the parent company and its subsidiaries, presenting them as one single entity. The amounts for subsidiaries are not merely reported in the investment accounts; they are fully integrated into the consolidated balance sheet, income statement, etc., eliminating intercompany transactions and balances.

Consolidated Statements Are Prepared as If a Company Is Organized