Why is it necessary to prepare consolidated financial statements for a group of companies?

Question

Answer

To comply with the subsidiary’s legal obligation to
prepare financial statements for external users.

Answer

To comply with the parent’s moral obligation to
prepare financial statements for external users.

Answer

To ensure that all
inter-company transactions are included in the group’s reported profit.

Answer

To present the financial position and performance of the parent and subsidiary as a single economic entity.

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