Which of the Following Statements Is True Regarding Mutual Ownership

question 68

Multiple Choice

Which of the following statements is true regarding mutual ownership between a parent and its subsidiary?

• A) The shares of the parent held by a subsidiary should be treated as outstanding stock on the consolidated balance sheet.
• B) Only the subsidiary's shares held by the parent should be eliminated in consolidation.
• C) The treasury stock approach is required to reflect parent shares held by the subsidiary.
• D) The treasury stock approach is required to eliminate subsidiary shares held by the parent company.
• E) The parent company does not need to file consolidated financial statements if there is mutual ownership.

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