When a Parent-Subsidiary Relation Exists, Consolidated Financial Statements Are Prepared

question 14

Multiple Choice

When a parent-subsidiary relation exists, consolidated financial statements are prepared in recognition of the accounting concept of:

• A) Reliability
• B) Materiality
• C) Legal entity
• D) Economic entity

---

Definitions:

Affidavit

A written statement made under oath, used as evidence in court.

Complaint

A formal legal document submitted to a court that initiates a lawsuit, detailing the plaintiff's grievances and the relief sought.

Legal Relief

Remedies or compensations provided through judicial proceedings for resolving a grievance or dispute.

Long-Arm Statute

A law that allows for the service of process beyond the borders of a state to individuals or entities that have sufficient connections to the state.