BRANCH ACCOUNTING
1. In an aggregated consolidated balance sheet, the subsidiary’s individual assets are
a.
Shown separately.
b.
Not included.
c.
Summed with the parent’s individual assets.
d.
Netted against its liabilities and shown as a net amount.
e.
None of the above.
2. In a disaggregated consolidated balance sheet, the subsidiary’s individual assets are
a.
Shown separately.
b.
Not included.
c.
Summed with the parent’s individual assets.
d.
Netted against its liabilities and shown as a net amount.
e.
None of the above.
3. The disaggregated reporting format of presenting a subsidiary’s financial statement
amounts in the consolidated statements would not serve any useful purpose when the
subsidiary is
a.
In a different line of business from the parent.
b.
In a different line of business from the parent and losing money.
c.
Restricted from paying dividends to the parent by regulatory authorities.
d.
Located in a foreign country.
e.
None of the above.
4. Which of the following is the best theoretical justification for consolidated financial
statements?
a.
In form, the companies are one entity; in substance, they are separate.
b.
In form, the companies are separate; in substance, they are one entity.
c.
In form and substance, the companies are one entity.
d.
In form and substance, the companies are separate.