If One Company Owns More Than 50% of the Common

question 44

Multiple Choice

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

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

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Definitions:

Line Current

The current that flows through the conductors of an electrical power system, such as in the power lines delivering electricity to consumers.

Phase Current

The current flowing through one phase circuit in a polyphase system, which could vary in magnitude and phase angle compared to currents in other phases.

Wye

A connection in three-phase systems where the ends of each phase are connected at a common point, forming a Y-like shape.

Delta

A method of connection for a three-phase electrical circuit that forms a triangle-like configuration.