Before undertaking the consolidation process, it may be necessary to make the following adjustments in relation to the individual statements if the parent and the subsidiary do not use the same accounting policies for like transactions in similar circumstances:
A) the subsidiary will prepare its own financial statements using the same accounting policies as the parent.
B) the parent will prepare its own financial statements using the same accounting policies as the subsidiary.
C) the subsidiary will prepare its own financial statements using accounting policies that are negotiated with the parent.
D) all of the options are incorrect.

Question

Quizplus · Accepted Answer

The subsidiary should adjust its financial statements to align with the parent's accounting policies to ensure consistency in the consolidated financial statements.

Before Undertaking the Consolidation Process, It May Be Necessary to Make