A Company Owning a Majority (But Less Than 100%) of Another

question 53

Multiple Choice

A company owning a majority (but less than 100%) of another company's voting shares on the date of acquisition should account for its subsidiary (in its consolidated balance sheet) :

• A) by including only its share of the fair market values of the subsidiary's net assets.
• B) by including only its share of the book values of the subsidiary's net assets.
• C) by including 100% of the fair market values of the subsidiary's net assets.
• D) by including 100% of the fair market values of the subsidiary's net assets and accounting for any unowned portion of the subsidiary's voting shares using the Non-Controlling Interest account.

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Definitions:

Regression

A defense mechanism in psychology where an individual's behavior reverts to an earlier stage of development, often in response to stressful situations.

Habituation

The diminishing of a physiological or emotional response to a frequently repeated stimulus.

Prosocial Behaviors

Actions intended to benefit others, including helping, sharing, comforting, and showing compassion.

Self-reliant

The ability to depend on oneself for various needs, making one confident in their independence and resourcefulness.