BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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determine the profi tability of specifi c subsidiaries.
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determine the total profi tability of companies under common control.
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determine the breadth of a parent company’s operations.
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determine the full extent of total obligations of companies under common control.
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Detailed explanation-1: -The consolidated statement of income does not include revenues generated internally by the parent company or its subsidiaries.
Detailed explanation-2: -The consolidated version of financial statements indicates the health of the business as a whole and will also show how each subsidiary within the group impacts on the parent business. Reducing the volume of paperwork involved.
Detailed explanation-3: -Consolidated financial statements are the financial statements of a group of entities that are presented as being those of a single economic entity. These statements are useful for reviewing the financial position and results of an entire group of commonly-owned businesses.
Detailed explanation-4: -Consolidated financial statements: the financial statements of a group presented as those of a single economic entity. Subsidiary: an entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent). Parent: an entity that has one or more subsidiaries.