A subsidiary is an entity that:
A) is controlled by another entity.
B) exercises control over a parent entity.
C) has the power to control a parent entity.
D) has significant influence over a parent entity.

Question

Quizplus · Accepted Answer

A subsidiary is an entity that is controlled by another entity, also known as the parent company. This means that the parent company has the power to govern the financial and operating policies of the subsidiary. Option B, C and D are incorrect as they indicate that the subsidiary entity exercises control, has the power to control or has significant influence over the parent entity, which is not the case.

A Subsidiary Is an Entity That