Investor P has control over another entity,Q.P is referred to as:
A) an associate entity
B) a parent entity
C) a consolidated entity
D) a minority shareholder.

Question

Quizplus · Accepted Answer

Investor P is referred to as a parent entity because it has control over another entity, Q. As a parent entity, P consolidates the financial statements of Q with its own. A is incorrect because an associate entity is one in which the investor has significant influence but not control. C is incorrect because a consolidated entity is the result of combining the financial statements of a parent entity and its subsidiaries. D is incorrect because being a minority shareholder means owning less than 50% of the shares in a company, which is not the case with Investor P.

Investor P Has Control Over Another Entity,Q