A Controlling Interest in a Company Implies That the Parent

question 20

Multiple Choice

A controlling interest in a company implies that the parent company​

• A)​owns all of the subsidiary's stock.
• B)​has acquired a majority of the subsidiary's common stock.
• C)​has paid cash for a majority of the subsidiary's stock.
• D)​has transferred common stock for a majority of the subsidiary's outstanding bonds and debentures.

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Definitions:

Accounts Payable

Liabilities representing amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Accounts Receivable

Debts incurred by customers to a company for delivered goods or services that remain unpaid.

Cash

Money in the form of coins and banknotes; the most liquid form of assets a company has.

Journalizing

The process of recording transactions in a company's journal before they are posted to the general ledger.