Answered: The entry to cancel the effects of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The entry to cancel the effects of the intercompany transactions in preparation of the
Consolidated Financial
Statements are made on:

A.the books of the subsidiary
B.The books of the parent if downstream sale, and the books of the subsidiary if upstream sale
C.the books of the parent
D.the working paper

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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