A Company That Owns Less Than 20% of Another Company's

question 21

True/False

A company that owns less than 20% of another company's stock may not use the consolidation method of accounting.

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Definitions:

Competitive Market

A market scenario where there are many buyers and sellers, and no single entity has the power to significantly influence the prices of goods and services.

Resource Allocation

The process of distributing available resources among various competing needs or uses in an effort to achieve maximum efficiency or to accomplish specific objectives.

Excise Tax

An indirect tax charged on the sale of a particular good or service, often included in the price of products like gasoline, alcohol, and tobacco.