4. Which of the following statements concerning consolidation is (are) INCORRECT?

A.Consolidation journal entries are necessary to eliminate and adjust the accounting records of the parent entity and its subsidiaries so that the aggregated financial data are presented from the viewpoint of the economic entity.

B.In consolidation, the parent entity's investment in a subsidiary is eliminated against the subsidiary's post-acquisition share capital and reserves.

C.Consolidation journal entries are prepared for the sole purpose of producing consolidated financial statements and are recorded in the books of the subsidiary concerned.

D.B and C

E.A, B and C

5. Which one of the following statements about the consolidation process is incorrect?

(A)There is no consolidation ledger.

(B)The consolidation journal records entries made up of debits and credits.

(C)Consolidation journal entries are posted to the parent entity's general ledger.

(D)The financial statement elements of parent and subsidiary are added together, making appropriate adjustments, to produce consolidated financial statements.

(E) Transactions between parent and subsidiary are not included in consolidated financial statements4. Which of the following statements concerning consolidation is (are) INCORRECT?

A.Consolidation journal entries are necessary to eliminate and adjust the accounting records of the parent entity and its subsidiaries so that the aggregated financial data are presented from the viewpoint of the economic entity.

B.In consolidation, the parent entity's investment in a subsidiary is eliminated against the subsidiary's post-acquisition share capital and reserves.

C.Consolidation journal entries are prepared for the sole purpose of producing consolidated financial statements and are recorded in the books of the subsidiary concerned.

D.B and C

E.A, B and C