The two business entities involved in an investment in securities with controlling influence,for which consolidated financial statements are prepared,are known as:
A)Parent and Investor
B)Subsidiary and Investee
C)Consolidator and Parent
D)Parent and Subsidiary
E)Both are referred to as partners.

Question

Quizplus · Accepted Answer

The parent company is the one that has controlling influence on the subsidiary, and the subsidiary is the investee. They are the two business entities involved in the investment where consolidated financial statements are prepared. Therefore, D (Parent and Subsidiary) is the correct choice.

The Two Business Entities Involved in an Investment in Securities