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:

Balance Sheet Approach

A method for evaluating foreign subsidiaries in which assets and liabilities are translated at the current exchange rate, whereas equity accounts are translated at the historical exchange rates.

Allowance for Doubtful Accounts

An accounting provision made for potential future bad debts that might arise from credit sales being unpaid.

Uncollectible Accounts

Receivables that are considered to be uncollectable and are written off as a loss because payment is highly unlikely.

Net Credit Sales

The total value of sales made on credit during a period, minus any returns or allowances.