If a Parent Has Some Control Over a Subsidiary but the Subsidiary

question 85

Multiple Choice

If a parent has some control over a subsidiary but the subsidiary is not consolidated,the subsidiary is accounted for as:

• A)a marketable security.
• B)an investment.
• C)a liability.
• D)a fixed asset.
• E)None of the answers are correct.

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Definitions:

Consumer Surplus

The divergence between what consumers are able and willing to shell out for a product or service and the actual cost they incur.

Marginal Benefit

The uplift in satisfaction or value derived from the consumption of an additional unit of a product or service.

Marginal Cost

An additional expense incurred from the production or acquisition of one more unit of a good or service.

Efficiency

The ability of a system or process to achieve a goal using the least amount of resources possible.