When One Corporation Acquires Control of Another Entity, the Investor

question 119

Multiple Choice

When one corporation acquires control of another entity, the investor corporation is referred to as the parent and the investee corporation as the

• A) subsidiary.
• B) joint venture.
• C) associate.
• D) child.

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Definitions:

Contributed Surplus

Contributed Surplus is an equity account that reflects excess amounts received by a company over the par value of its stock from the sale of shares directly to investors.

Common Shares

Equity investments that represent ownership in a company, granting holders voting rights and a share in the company's profits through dividends.

Non-Current Liability

Liabilities not due within one year or the operating cycle of the business, reflecting long-term financial commitments.

Current Liability

A company's debt or obligation that is due within one year or within the normal operating cycle, whichever is longer.