GL Consolidation: Test Pool (ML-Generated)

  1. Why do you need to perform GL consolidation?
    • To regularly collect data from one or multiple subsidiaries into the parent company for reporting purposes
    • To calculate financial ratios for the parent company
    • To prepare tax returns for the subsidiaries
  2. What steps do you perform to prepare data for consolidation in each consolidation unit? (Select all correct responses.)
    • Prepare the trial balance for the consolidation period and ensure its accuracy
    • Close the financial period for which consolidation will be performed, if it is open
    • Prepare the income statement for the consolidation period and ensure its accuracy
    • Open the financial period for which consolidation will be performed, if it is closed
    • Review the balance sheet for the consolidation period and ensure its accuracy
  3. When should separate ledgers be used in the parent company?
    • When you are consolidating data of different types, such as actual data and budget data
    • When you are importing consolidation data from the consolidation units
    • When you are performing GL consolidation between the parent company and a subsidiary company
    • When you are mapping the accounts and subaccounts of the consolidation unit to the respective accounts and subaccounts of the parent tenant.
  4. Suppose that you are preparing the system for GL consolidation. You need to map the GL accounts of the consolidation unit to the respective accounts of the parent tenant on the Chart of Accounts form. What account is not involved in mapping and why?
    • The YTD Net Income account is not involved in mapping because transactions cannot be posted directly to this account.
    • The Travel Expenses account is not involved in mapping because it is a consolidated account.
    • The Airfare, Taxi, and Rentals accounts are not involved in mapping because they are part of the parent tenant's chart of accounts.
  5. What can you do if the parent tenant has a more detailed chart of accounts than those of the consolidation units?
    • Map multiple accounts in a consolidation unit to a single account of the parent tenant
    • Create a new account in the consolidation unit to match the parent tenant's chart of accounts
    • Delete the extra accounts in the parent tenant's chart of accounts to match the consolidation unit
    • Ignore the differences in the chart of accounts; reporting will still be accurate