05) Which of the following statement/s regarding the method ofconsolidation is true:(1) Subsidiaries are consolidated in full(2) Associates are equity accountedSelect one:O a. Neither statementO b. Statement (1) onlyc.Both statementsO d. Statement (2)

Answered: 05) Which of the following stateme…

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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05) Which of the following statement/s regarding the method of
consolidation is true:
(1) Subsidiaries are consolidated in full
(2) Associates are equity accounted
Select one:
O a. Neither statement
O b. Statement (1) only
c.
Both statements
O d. Statement (2)

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Step 1 Description

According to the given question, we are required to select the correct answer from the options given in the question.

Consolidations:

Consolidations refer to the financial strategy by which one strong company acquires some portion or entire stocks of another company for controlling the business activities of that company. Under this method, two parties are involved such as the parent company and subsidiary company or associate company.

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