In Which of the Following Situations Do Accounting Standards Not

question 32

Multiple Choice

In which of the following situations do accounting standards not require that the financial statements of the parent and subsidiary be consolidated?

• A)A corporation creates a new 100 percent owned subsidiary
• B)A corporation purchases 90 percent of the voting stock of another company
• C)A corporation has both control and majority ownership of an unincorporated company
• D)A corporation owns less-than a controlling interest in an unincorporated company

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Definitions:

Internal Users

Individuals or groups within an organization who use its information or systems for operational purposes.

Management Reports

Compiled data and analysis prepared for business managers to aid in making informed decisions regarding the company's operations.

Decision Makers

Individuals or groups within an organization responsible for making choices that affect the company’s strategy, operations, and financial outcomes.

Adjusting Journal Entries

Entries made in the accounting records to correct errors or allocate income and expenses to the correct periods.