When a Parent- Subsidiary Relationship Exists Between Two Companies

question 44

Multiple Choice

When a parent- subsidiary relationship exists between two companies,:

• A)the parent company must use the cost method to account for the subsidiary.
• B)the parent company will keep one set of accounting records covering both companies.
• C)both the parent and the subsidiary will continue to keep their own separate accounting records as if the parent- subsidiary relationship does not exist.
• D)the subsidiary company will keep one set of accounting records covering both companies.

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Definitions:

Machiavellianism

A personality trait that involves manipulation and exploitation of others, a cynical disregard for morality, and a focus on self-interest and deception.

Mutual Goals

Objectives shared by all parties in a negotiation or collaborative effort, fostering cooperation and a sense of common purpose.

Distributive Bargaining

A negotiation process focused on dividing a limited amount of resources, where one party's gain is typically another's loss, echoing the principles of distributive negotiations but emphasizing the competitive aspect.

Extraversion

A personality trait characterized by outgoingness, high energy, and engagement in social situations.