Consolidation might not be appropriate even when the majority owner has control if:
A)The subsidiary is in bankruptcy.
B)A manufacturing-based parent has a subsidiary involved in banking activities.
C)The subsidiary is located in a foreign country.
D)The subsidiary has a different fiscal-year end than the parent.

Question

Consolidation might not be appropriate even when the majority owner has control if:
A)​The subsidiary is in bankruptcy.
B)​A manufacturing-based parent has a subsidiary involved in banking activities.
C)​The subsidiary is located in a foreign country.
D)​The subsidiary has a different fiscal-year end than the parent.

Quizplus · Accepted Answer

Consolidation might not be appropriate if the subsidiary is in bankruptcy because the parent company may not have effective control over the subsidiary's operations and financial decisions during the bankruptcy process.

Consolidation Might Not Be Appropriate Even When the Majority Owner