Consolidated financial statements are prepared by companies owning less than 50% of the outstanding shares in a subsidiary.

Question

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Consolidated financial statements are prepared by companies owning more than 50% of the outstanding shares in a subsidiary. This is because owning more than 50% of the shares gives the parent company control over the subsidiary and the ability to make decisions that impact its financial performance.

Consolidated Financial Statements Are Prepared by Companies Owning Less Than