When a Company Owns More Than 50% of the Common

question 148

Multiple Choice

When a company owns more than 50% of the common stock of another company

• A) consolidated financial statements are usually prepared.
• B) the cost method of accounting is used.
• C) they are referred to as the subsidiary.
• D) they recognize revenue when dividends are received.

---

Definitions:

Executive Branch

The branch of the United States government responsible for the execution and enforcement of laws, headed by the President.

Supreme Court

The highest federal court in the United States, consisting of nine Justices and holding the ultimate appellate jurisdiction over all U.S. federal court and state court cases concerning issues of federal law.

Virginia Plan

A proposal by Virginia delegates for a bicameral legislative branch during the drafting of the United States Constitution, focusing on proportional representation.

Philadelphia Convention

The gathering in 1787 that drafted the Constitution of the United States in Philadelphia, also known as the Constitutional Convention.