Which of the following statements is true if a company owns more than 50% of the common shares of another company?

Question

Quizplus · Accepted Answer

If a company owns more than 50% of the common shares of another company, it is likely that a parent-subsidiary relationship exists. In this case, the purchasing company is considered the parent company and the company being purchased is considered the subsidiary. The parent company has control over the subsidiary and must consolidate their financial statements. The cost and equity methods are not appropriate in this situation.

Which of the Following Statements Is True If a Company