Which of the following accounts CANNOT be altered by a consolidation adjusting entry?a.Accounts receivableb.Income tax payablec.Deferred tax assetd.Revenue

The answer is d. Revenue.

Here's why:

a. Accounts Receivable: This account can be altered by a consolidation adjusting entry. For example, if a parent company sells goods to a subsidiary, the parent company will record this as a sale and increase its accounts receivable. However, during consolidation, this intercompany transaction needs to be eliminated to avoid double counting. Therefore, a consolidation adjusting entry will decrease the accounts receivable.

b. Income Tax Payable: This account can also be altered by a consolidation adjusting entry. For instance, if the parent company and its subsidiaries have different tax rates, the consolidation process may require adjustments to the income tax payable account to reflect the consolidated tax expense.

c. Deferred Tax Asset: This account can be altered by a consolidation adjusting entry as well. Deferred tax assets arise from temporary differences between the tax basis of assets and their reported amount in the financial statements. These differences may need to be adjusted during the consolidation process.

d. Revenue: This account cannot be altered by a consolidation adjusting entry. Revenue is recognized when it is earned, not when cash is received. Therefore, consolidation adjusting entries do not affect the revenue account because they do not change the fact that revenue has been earned.

The answer is d. Revenue.

Here's why:

a. Accounts Receivable: This account can be altered by a consolidation adjusting entry. For example, if a parent company sells goods to a subsidiary, the parent company will record this as a sale and increase its accounts receivable. However, in the consolidated financial statements, this is an internal transaction and needs to be eliminated. Therefore, a consolidation adjusting entry will decrease the accounts receivable.

b. Income Tax Payable: This account can also be altered by a consolidation adjusting entry. For instance, if the parent company and its subsidiaries have different tax rates, the consolidated income tax payable may be different from the sum of the individual companies' income tax payable.

c. Deferred Tax Asset: This account can be altered by a consolidation adjusting entry as well. For example, if a subsidiary has a deferred tax asset, but the parent company does not expect the subsidiary to generate enough future taxable income to realize this asset, a valuation allowance (which is a contra-asset account) may be set up against this deferred tax asset in the consolidated financial statements.

d. Revenue: This account cannot be altered by a consolidation adjusting entry. The revenue of the parent company and its subsidiaries are added together in the consolidated financial statements. There is no need to adjust the revenue account because it represents external transactions with customers, not internal transactions between the parent company and its subsidiaries.