If One Company Owns More Than 50% of the Common

question 110

Multiple Choice

If one company owns more than 50% of the common stock of another company

• A) the cost method should be used to account for the investment.
• B) a partnership exists.
• C) a parent-subsidiary relationship exists.
• D) the company whose stock is owned must be liquidated.

---

Definitions:

Effort

The amount of physical or mental energy put into achieving a particular task or outcome.

Plant Managers

Individuals responsible for overseeing the daily operations of a manufacturing facility or plant.

Multi-Plant Firms

Companies or enterprises that operate and manage more than one production or manufacturing facility.

Capacity

The maximum amount of something that a facility or system can contain or produce.