On January 1, 2011, P Company Purchased All of the Outstanding

question 14

Multiple Choice

On January 1, 2011, P Company purchased all of the outstanding common stock of S Company. The consolidation of the two balance sheets requires a

• A)credit adjustment to eliminate P Company's "Investment in S Company" account.
• B)debit adjustment to eliminate S Company's "Investment in P Company" account
• C)debit adjustment to eliminate P Company's "Investment in S Company" account
• D)credit adjustment to eliminate S Company's "Investment in P Company" account

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Definitions:

Elastic Demand

A situation where the quantity demanded of a product changes significantly in response to a change in price.

Substitutes

Products or services that can be used in place of each other; an increase in the price of one leads to an increase in demand for the other.

Available

Referring to resources or goods that are obtainable and can be utilized.

Perfectly Price Elastic

This refers to a situation where the demand for a product or service changes infinitely with a very small change in price.