Question

When Dollar General buys more than 50% of the stock of another company, Dollar General is called the parent of that company, and the company whose stock has been purchased is known as a subsidiary of Dollar General. All of Dollar General's subsidiaries are wholly owned (100%) by Dollar General. What is meant by the term "consolidated," as in the "Consolidated Statements of Income," "Consolidated Balance Sheets," etc.? (You may have to do a little research to answer this question).

Answer 1

Answer:

Dollar General

Consolidated means that the financial statements of the parents have been combined with the financial statements of its subsidiaries so that the combined entities are presenting a single set of financial statements, as if they were one entity, which they are in the group sense.

Explanation:

For example, the income statement of Dollar General will be combined or consolidated with the income statement of one or all of its subsidiaries so that the investor has a view of the consolidated net income of the group.  To achieve this, some transactions that were done with inter-group companies will be eliminated, especially when the transactions have not been completed with entities outside the group.  For example, inventories bought from one company by another in the group, which have not been sold to the outside of the group will be eliminated so that the group does not assume to have made profits from itself.