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:

Liquidity Ratio

A financial metric used to determine an entity's ability to pay off its short-term obligations with its liquid assets.

Asset Management Ratio

Financial ratios that measure how effectively a company manages its assets to produce sales and maximize profitability.

Leverage Ratio

A financial metric indicating the level of debt relative to equity or assets, used to assess a company's ability to meet financial obligations.

Project Management

The application of processes, methods, skills, knowledge and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters.