The Company Whose Stock Is Owned by the Parent Company

question 90

Multiple Choice

The company whose stock is owned by the parent company is called the

• A)controlled company.
• B)subsidiary company.
• C)investee company.
• D)sibling company.

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Definitions:

Accounting Profit

The difference between a firm's total revenue and its explicit costs, often reported in the financial statements.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of a company.

Accounting Profit

The difference between the total revenue received from sales and the total explicit costs of a business.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.