SECTION A:Multiple Choice Question

1.The consolidated financial statements reflect the effects of transactions:

a. with external parties to the group only.

b. between internal parties to the group only.

c. with some internal and external parties to the group.

d. both between internal parties and with external parties to the group.

2.When preparing consolidated financial statements, what is the name given to the combined entities that are made up of a parent entity and all its subsidiary entities?

a. Consolidation

b. Combination

c. Associates

d. Group

3.A group may:

a. only have one parent.

b. have more than one parent.

c. have a few different sub-groups.

d. only have one parent, but it may have a few different sub-group.

ly have one parent, but it may have a few different sub-group.

4.The process of preparing the combined financial statements of a group of entities is known as:

a. aggregation.

b. consolidation.

c. accumulation.

d. combination.

5.The preparation of consolidated financial statements involves:

a.adjusting entries in the accounting records of the parent.

b.adjusting entries in the accounting records of the subsidiary.

c.together the financial statements of the investor and the associate.

d.adding together the financial statements of the parent and the subsidiaries.