Which of the following is the best criteria to use in determining whether a firm is a parent of another entity?
A) The firm owns a majority of voting shares
B) The firm often receives a dividend from its investment
C) There is no link between the investor and power over relevant activities
D) The firm has control over the entity

Question

Quizplus · Accepted Answer

Control over the entity is the key criterion for determining a parent-subsidiary relationship, as it indicates the ability to direct the relevant activities of the entity.

Which of the Following Is the Best Criteria to Use