Which of the following statements is incorrect?Group of answer choicesWhere consolidated financial statements are prepared over a number of years, consolidation entries need to be made every time a consolidation worksheet is prepared.Consolidation adjusting entries affect the ledger accounts of the parent and subsidiaries.A consolidation worksheet is used to help the process of adding together the financial statements of the parent and its subsidiaries.There are no consolidated ledger accounts.

Which of following statements is not correct in relation to the consolidation process?Group of answer choicesTo avoid double counting of the group's equity, the equity of the subsidiary at the acquisition date needs to be eliminated from the records of the subsidiary.Subsequent to the acquisition date, any intragroup transactions within the group needs to be adjusted and eliminated.The fair value adjustments of assets that were not previously recorded by the subsidiary are recognised in the business combination valuation entries.Consolidated financial statements should offset the carrying amount of the parent's investment in the subsidiary.

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: Group of answer choicesthe parent will prepare its own financial statements using the same accounting policies as the subsidiary.all of the options are incorrect.the subsidiary will prepare its own financial statements using accounting policies that are negotiated with the parent.the subsidiary will prepare its own financial statements using the same accounting policies as the parent.

The process of preparing consolidated financial statements requires that:

Which of the following statements about consolidated financial statements is true? Group of answer choicesThe subsidiaries of corporations cease to be separate legal entities when their parent corporations use consolidated financial statements.Generally, most of the voting stock of a subsidiary should be owned by the holding company or by the same interests if the associated companies’ financial statements are to be combined.Consolidated financial statements are required of all companies in the United States.Consolidated financial statements make footnotes unnecessary.

The key characteristic that determines when consolidated financial statements should be prepared is: