Question 1 The financial effects of intragroup transactions must be eliminated/adjusted on consolidation because:

the consolidated financial statements present the financial position and results as if the parent and its subsidiary were a single economic unit.

the consolidation process begins with the accounting records of the parent and its subsidiary which include the financial effects of all transactions.

only the financial effects of transactions with parties external to the group are relevant when presenting the consolidated financial statements.

all of the above.