If One Company Owns More Than 50% of the Common

question 45

Multiple Choice

If one company owns more than 50% of the common stock of another company:

• A) the equity method should be used to account for the investment.
• B) a partnership exists.
• C) a parent-subsidiary relationship exists.
• D) the company whose stock is owned must be liquidated.

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Definitions:

Cooperation

The process or action of working together to the same end, especially in a joint intellectual effort.

Immune Response

The body's defensive reaction to foreign substances or microorganisms, including both specific and nonspecific mechanisms.

Eosinophils

A type of white blood cell that is involved in the body’s immune response, particularly in fighting off certain parasitic infections and in allergic reactions.

Phagocytosis

The ingestion of particles by a cell or phagocyte, playing a crucial role in the immune response by clearing pathogens.