What are Eliminating entries in Accounting?

Answer 1

You're talking consolidations here. In preparing consolidated financial statements, an entity combines the financial statements of the parent and its subsidiaries line by line by adding together like items of assets, liabilities, equity, income and expenses. In order that the consolidated financial statements present financial information about the group as that of a single economic entity, the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary are eliminated. Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Profits and losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full.
All the accounting entries needed to carry out the above eliminations are known as eliminating entries.

Answer 2

Eliminating Entries

Answer 3

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What are Eliminating entries in Accounting?

Answer 4

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Which of the following transactions would not require an eliminating entry when an accountant is preparing consolidated financial statements? B) Purchase of merchandise from nonaffiliate Which of the following transactions would not require an eliminating entry when an accountant is preparing consolidated financial statements? B) Purchase of merchandise from nonaffiliate (isn't this the same question as above?) Welu Corporation purchases 80 percent of the voting stock of Bluth Corporation for $170,000. Bluth has contributed capital of $90,000 and retained earnings of $110,000. The consolidated financial statements will contain E) both goodwill and minority interest. A 40 percent investment in another company would be reported on the balance sheet at fair market value. B) False 5 percent investment in another company would be reported on the balance sheet at the fair market value. A) True B) False Can be either - it depends on the classification. Are they held for trading? I guess they want you to say True. The account Unrealized Loss on Long-Term Investments is disclosed in the financial statements as a(n) B) contra account within stockholders equity. A parent-subsidiary relationship exists only when the parent owns all of the voting stock of the subsidiary. B) False

Answer 5

I think they are the entries at year end to eliminate the income & expense accounts and to allocate them to the capital/retained earnings account