S1: The “Home Office” account on the branch’s books and the “Branch Office” account on the Home Office books are examples of reciprocal accounts whose balances would be combined when the home office preparing a balance sheet for the Branch Office. S2: In preparing the financial statements of the home office and its various branches, reciprocal accounts are eliminated and nonreciprocal accounts are combined. A. Both statements are incorrect. B. Only S1 is correct. C. Only S2 is correct. D. Both statements are correct.
S1: The “Home Office” account on the branch’s books and the “Branch Office” account on the Home Office books are examples of reciprocal accounts whose balances would be combined when the home office preparing a balance sheet for the Branch Office. S2: In preparing the financial statements of the home office and its various branches, reciprocal accounts are eliminated and nonreciprocal accounts are combined. A. Both statements are incorrect. B. Only S1 is correct. C. Only S2 is correct. D. Both statements are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S1: The “Home Office” account on the branch’s books and the “Branch Office” account on the Home Office books are examples of reciprocal accounts whose balances would be combined when the home office preparing a balance sheet for the Branch Office. S2: In preparing the financial statements of the home office and its various branches, reciprocal accounts are eliminated and nonreciprocal accounts are combined.
A. Both statements are incorrect.
B. Only S1 is correct.
C. Only S2 is correct.
D. Both statements are correct.
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