Which Statement Is Correct About Subsidiaries

question 13

Multiple Choice

Which statement is correct about subsidiaries?

• A)An arrangement where one party has the power to participate in the financial and operating policy decisions of another entity.
• B)An arrangement where one entity governs the financial and operating policies about another entity.
• C)A contractual arrangement whereby two or more parties share control over an economic activity and all strategic decisions requires unanimous consent by all parties.
• D)An arrangement that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

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Definitions:

Sales Contract Formation

The process through which parties agree upon the terms of a sale, resulting in a legally binding contract encompassing the sale of goods or services.

Interpretation

The act of explaining, reframing, or understanding the meaning or significance of something.

Tangible Things

Physical items that can be seen, touched, and measured, as opposed to intangible items like rights or patents.

Identification

The process of recognizing or establishing the identity of a person or thing.