Consolidated Financial Statements Quiz

Consolidated Financial Statements are prepared by a:

• Partnership firm

• Holding company

• Sole proprietorship

• Government body

A Holding Company is one which:

• Has no assets

• Controls another company

• Sells insurance

• Manufactures products only

A Subsidiary Company is one which is:

• Controlled by another company

• Owned by the government

• Limited by guarantee

• Tax-exempt

Consolidated financial statements include:

• Only the holding company’s accounts

• Separate balance sheets

• Combined financial information of the group

• Cash flow statement only

The purpose of consolidation is to present:

• Multiple tax reports

• Separate entity view

• Unified financial position of a group

• Only the subsidiary’s performance

Consolidated Financial Statements are governed by:

• Income Tax Act

• Companies Act, 2013

• GST Act

• Banking Regulation Act

AS 21 relates to:

• Valuation of inventory

• Revenue recognition

• Consolidation of financial statements

• Amalgamation

As per law, holding companies are required to:

• Avoid consolidation

• Prepare standalone accounts only

• Prepare consolidated financial statements

• Use only manual accounting

Financial statements of a subsidiary used for consolidation must be:

• Different in format

• Older than two years

• In the same reporting period

• From foreign branches only

The consolidation process excludes:

• Inter-company transactions

• External transactions

• Shareholders’ equity

• Minority interest