The Process of Preparing Consolidated Financial Statements Involves the Elimination

Multiple Choice

The process of preparing Consolidated Financial Statements involves the elimination of inter-company transactions between a Parent Company and its subsidiary. Where would these entries be recorded?

A) On the Parent's books only.
B) On the Subsidiary's books.
C) The entries are not recorded in the books of either company. The entries are only made on the working papers.
D) The effect of any inter-company transaction must be reflected on the books of both companies.