Which of the following statements is true? If a company has control over the financial policies...
Which of the following statements is true?
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If a company has control over the financial policies of another entity, it is deemed to have control over the operating policies. |
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Joint control can exist where share ownership by investing companies is not equal. |
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A reporting entity is a single entity that meets certain criteria. |
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Control of a subsidiary must be actively exercised |
Homework Answers
Answer:
A company can control over an entity when it has a 25% or more of its share ownership, so it is not necessary that for joint ownership equal share right should be there. A joint control can exist when there are different share ownership rights.
So Correct answer is option B.
- Also it is not mandatory that if a company control a financial policy of the company it should also control its operating policy.
- Control over subsidiary needs not to be mandatorily excercised, its a willful actifity.
- A reporting entity is not always a single entity that meets certain criteria.
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