When indirect control is present, which of the following statements is true?
A) At least one company within the business combination holds a parent and a subsidiary relationship.
B) The parent company owns a percent of subsidiary and subsidiary owns a percent of the parent.
C) Consolidated financial statements are required for only one subsidiary.
D) Recognition of income for an indirectly owned subsidiary is ignored.
E) Only dividend income is recognized for an indirectly owned subsidiary.

Question

Quizplus · Accepted Answer

Indirect control implies that a parent company controls a subsidiary through another subsidiary, establishing a parent-subsidiary relationship within the business combination.

When Indirect Control Is Present, Which of the Following Statements