Consolidated Financial Statements Are Appropriate Even Without a Majority Ownership

question 17

Multiple Choice

Consolidated financial statements are appropriate even without a majority ownership if which of the following exists:

• A)​the subsidiary has the right to appoint members of the parent company's board of directors.
• B)​the parent company has the right to appoint a majority of the members of the subsidiary's board of directors because other ownership interests are widely dispersed.
• C)​the subsidiary owns a large minority voting interest in the parent company.
• D)​the parent company has an ability to assume the role of general partner in a limited partnership with the approval of the subsidiary's board of directors.

---

Definitions:

Three-Eighths Interest

Refers to a specific interest rate of 3/8, or 0.375, often used in financial agreements or calculations.

Ski Chalet

A type of mountain lodge or cabin, often located in ski resorts, designed primarily for accommodation and leisure activities related to skiing.

Billing

The process of sending or presenting invoices to customers for goods or services provided.

Invoice

A document issued by a seller to a buyer, detailing products or services sold, including quantities, prices, and terms of payment.