Combined Financial Statements

Question 1

When preparing combined financial statements, the elimination of an investment held by one combining company in another combining company should be based on the amount of the investment.
True
False

Answer 1

True

Question 2

Both corporate and non-corporate entities can be parties to the same combined financial statements.
True
False

Answer 2

True

Question 3

When preparing combined financial statements, the elimination of an investment held by one combining company in another combining company can result in a difference between the amount of the investment and the equity eliminated, and that difference will need to be allocated.
True
False

Answer 3

False

Question 4

Revenues and expenses between companies being combined should be eliminated.
True
False

Answer 4

True

Question 5

In preparing combined financial statements, the treatment of foreign operation issues of any of the companies being combined would be the same as the treatment of foreign operations issues when consolidated financial statements are prepared.
True
False

Answer 5

True

Question 6

In order to prepare consolidated financial statements, one of the firms being consolidated must have controlling ownership of the other firms.
True
False

Answer 6

True

Question 7

The financial statements of two or more entities can be aggregated only in consolidated financial statements.
True
False

Answer 7

False