ntercompany debt that must be eliminated from consolidated financial statements may result from: a. one member of a consolidated group selling its bonds directly to another member of the group. b. one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties. c. one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group. d. all of the above.
ntercompany debt that must be eliminated from consolidated financial statements may result from:
|
a. |
one member of a consolidated group selling its bonds directly to another member of the group. |
|
b. |
one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties. |
|
c. |
one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group. |
|
d. |
all of the above. |
Intercompany debts are eliminated from the consolidated financial statements. Intercompany transactions mean transactions involving the members of the group. There are various types of intercompany debts between members of the group.
When preparing consolidated financials these intercompany transactions within the group are eliminated. Only third-party transactions will be present in the consolidated financial statements. This is done to ensure that the assets, liabilities, expenses, and income are not overstated due to double counting.
Step by step
Solved in 2 steps
