When a Parent-Subsidiary Relationship Exists Between Two Companies

question 45

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) the subsidiary company will keep one set of accounting records covering both companies
• D) both the parent and the subsidiary will continue to keep their own separate accounting records as if the parent-subsidiary relationship does not exist

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Definitions:

Language Abilities

The capacity to understand, produce, and use language effectively to communicate.

Receptive Vocabulary

The range of words a person understands when heard or read, as opposed to those they use actively in speech or writing.

Productive Vocabulary

The set of words a person is able to produce or use actively in speech and writing.

Development of Language

Refers to the process by which humans acquire the capacity to perceive, produce, and use words to understand and communicate.