Consolidated Financial Statements Should Be Prepared Only When a Subsidiary

question 164

True/False

Consolidated financial statements should be prepared only when a subsidiary company has a controlling interest in the parent company.

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Definitions:

Contingencies

Conditional liabilities or assets that may arise due to future events, whose effects cannot be determined with certainty at the present time.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific time, showing assets, liabilities, and equity.

Lawsuit Loss

Financial damages that a company is required to pay as the result of legal judgment or settlement of a lawsuit.

Probable Loss

An estimated loss from a contingent liability that is likely to occur and can be reasonably estimated.