In general, consolidated financial statements should be prepared

Question

Quizplus · Accepted Answer

Consolidated financial statements should be prepared when a corporation owns more than 50% of the common stock of another company. This is because when a corporation owns more than 50% of another company, it has significant control over the subsidiary and the subsidiary's financial results have a material impact on the controlling corporation's financial statements. Consolidated financial statements provide a more complete picture of the financial position and performance of the controlling corporation and its subsidiaries as if they were a single entity.

In General, Consolidated Financial Statements Should Be Prepared