Which of the Following Statements Is True If a Company

question 46

Multiple Choice

Which of the following statements is true if a company owns more than 50% of the common shares of another company?

• A)The cost method should be used to account for the investment.
• B)A partnership exists.
• C)A parent-subsidiary relationship likely exists.
• D)The investment must be accounted for using the equity method.

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Definitions:

Ph.D.

A Doctor of Philosophy degree, a postgraduate academic degree awarded by universities to individuals who have completed a thesis offering a significant new contribution to knowledge in their subject.

Meritocracy

A system in which advancement is based on individual ability or achievement.

Conspicuous Consumption

The practice of purchasing and using goods of higher quality or quantity than needed, to display wealth or social status.

Louis Vuitton

A luxury fashion brand founded in France, known for its leather goods, high-end clothing, and accessories, characterized by distinctive designs and craftsmanship.