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An Introduction to Consolidated... True or False 1 . A corporation can gain a controlling interest in another corporation through both direct and indirect stock ownership. True False 2 . A parent corporation and its subsidiary are separate accounting entities but one legal entity. True False 3 . When the parent and subsidiary corporations have different fiscal periods, the consolidated financial statements are prepared for the parent’s fiscal period. True False 4 . The entry to consolidate parent and subsidiary corporations is recorded on the books of the parent. True False 5 . The entry to consolidate parent and subsidiary corporations is recorded on the books of the subsidiary. True False 6 . Intercompany receivables and payables must be eliminated when preparing consolidated financial statements. True False 7 . Push-down accounting is required by the SEC when a subsidiary is substantially wholly owned and does not have publicly held debt or preferred stock outstanding. True False
