When an Investor Owns More Than 50% of the Common

question 33

Multiple Choice

When an investor owns more than 50% of the common shares of another company,

• A) consolidated financial statements are usually prepared.
• B) the fair value through profit or loss model is used.
• C) the investor is called a subsidiary.
• D) the investor recognizes revenue only when dividends are received.

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Definitions:

Certifies

Officially recognize or attest, often in writing, that a set of conditions, standards, or requirements has been met.

Financial Ratios

Metrics derived from a company's financial statements to assess its performance, liquidity, profitability, and other aspects.

Prior Period

A previous accounting time frame used for comparison purposes or to correct errors in financial statements.

Same Industry

Refers to companies and businesses that operate within the same sector or category, offering similar products or services.