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Which one of the following statements is incorrect? A parent can control a subsidiary when it acquires more than 50% of the voting rights of the subsidiary. An investor can control a subsidiary when it has rights to variable returns from the subsidiary. A parent controls a subsidiary only if it acquires 50% or more of the shares of the subsidiary. A parent controls a subsidiary if, amongst other things, it exerts power over the subsidiary.

Which one of the following statements is incorrect? A parent can control a subsidiary when it acquires more than 50% of the voting rights of the subsidiary. An investor can control a subsidiary when it has rights to variable returns from the subsidiary. A parent controls a subsidiary only if it acquires 50% or more of the shares of the subsidiary. A parent controls a subsidiary if, amongst other things, it exerts power over the subsidiary.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which one of the following statements is incorrect?

  1. A parent can control a subsidiary when it acquires more than 50% of the voting rights of the subsidiary.

  2. An investor can control a subsidiary when it has rights to variable returns from the subsidiary.

  3. A parent controls a subsidiary only if it acquires 50% or more of the shares of the subsidiary.

  4. A parent controls a subsidiary if, amongst other things, it exerts power over the subsidiary.

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