S1: Consolidated net income is equal to the parent’s income from its net income under its Income Statement, plus the net income from each of the consolidated subsidiaries, adjusted for any differential write-off. S2: It is useful to formulate eliminating entries in general form, because they are recorded in the general journal of the parent, to be sure that they balance before entering them in the working paper. A. Both statements are correct B. Only S2 is correct C. Only S1 is correct D. Both statements are incorrect
S1: Consolidated net income is equal to the parent’s income from its net income under its Income Statement, plus the net income from each of the consolidated subsidiaries, adjusted for any differential write-off. S2: It is useful to formulate eliminating entries in general form, because they are recorded in the general journal of the parent, to be sure that they balance before entering them in the working paper. A. Both statements are correct B. Only S2 is correct C. Only S1 is correct D. Both statements are incorrect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S1: Consolidated net income is equal to the parent’s income from its net income
under its Income Statement, plus the net income from each of the consolidated
subsidiaries, adjusted for any differential write-off. S2: It is useful to formulate
eliminating entries in general form, because they are recorded in the general
journal of the parent, to be sure that they balance before entering them in the
working paper.
A. Both statements are correct
B. Only S2 is correct
C. Only S1 is correct
D. Both statements are incorrect
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