_____ A valid reason for not consolidating a subsidiary is
A) Applicable state law prohibits the subsidiary from making loans to its parent company.
B) The subsidiary's liabilities equal its assets.
C) The subsidiary has a serious cash shortage and will not be able to pay dividends for the foreseeable future.
D) The parent has substantial inventory sales to the subsidiary.
E) None of the above.

Question

Quizplus · Accepted Answer

None of the options A, B, C, or D are valid reasons for not consolidating a subsidiary. Consolidation is generally required when a parent company has control over a subsidiary, regardless of these conditions.

_____ a Valid Reason for Not Consolidating a Subsidiary Is