How do I tell an adjusting entry from a consolidation elimination on FAR simulations?
Ask which reporting layer the entry belongs to.
An adjusting entry updates one company's own books for accrual timing, such as unearned revenue becoming earned, wages incurred but unpaid, or prepaid costs being used. A consolidation elimination exists only on the consolidated worksheet. It removes parent-subsidiary balances, intercompany balances, or the parent's investment in the subsidiary.
If the entry would be posted to a standalone general ledger, think adjusting entry. If it only makes the parent and subsidiary look like one reporting entity, think elimination.
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