_____ A parent generally will not consolidate a subsidiary that
A) Is unable to distribute dividends because of a cash shortage that is expected to be temporary.
B) Has completely emerged from bankruptcy reorganization proceedings.
C) Has an entirely different board of directors than the parent.
D) Has total assets and earnings that are less than 10% of the parent's total assets and earnings, respectively.
E) None of the above.

Question

Quizplus · Accepted Answer

A parent is expected to consolidate a subsidiary unless specific criteria are met, such as lack of control. The situations described in options A, B, C, and D do not typically exempt a parent from consolidating a subsidiary. Temporary cash shortages, differences in board composition, emergence from bankruptcy, or relative size of assets and earnings do not inherently preclude consolidation.

_____ a Parent Generally Will Not Consolidate a Subsidiary That