Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?
A) historical cost
B) industry practices
C) reporting entity
D) materiality

Question

Quizplus · Accepted Answer

The reporting entity assumption supports the preparation of consolidated financial statements by recognizing that the financial information of parent and its subsidiaries (wholly owned but separately identifiable businesses) can be presented as that of a single economic entity. This assumption allows for the combination of financial information across different entities under common control into one set of financial statements.

Which One of the Following Assumptions or Principles Most Logically