How Is Control Determined When a Parent Company Does Not

question 43

Multiple Choice

How is control determined when a parent company does not own a majority of the voting stock of a subsidiary?

• A) Controlling the subsidiary's investing activities.
• B) Controlling the subsidiary's operating activities.
• C) Controlling the subsidiary's financing activities.
• D) Criteria that establish effective control include control of the subsidiary's senior management or board of directors, the control of the subsidiary's operating, investing, or financing activities, and the right to obtain control by buying more shares after a triggering event.

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Definitions:

Focusing Attention

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Principles of Psychology

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