The two business entities involved in an investment in securities with controlling influence, for which consolidated financial statements are prepared, are known as:
A) Parent and Subsidiary
B) Parent and Investor
C) Both are referred to as partners.
D) Subsidiary and Investee
E) Consolidator and Parent

Question

Quizplus · Accepted Answer

The parent and subsidiary are the two business entities involved in an investment in securities with controlling influence where consolidated financial statements are prepared. The parent has control over the subsidiary and the financial statements of both entities are combined into one for reporting purposes.

The Two Business Entities Involved in an Investment in Securities