
Concept Introduction:
The various terms are used here.
The terms that are used here are
a. Subsidiary
A subsidiary is the company whose shares are bought by another company. But the purchasing company must buy shares more than 50% of ownership.
b. Parent
A parent company is the company shares of the other company more than 50% of ownership. The company whose shares are bought by another company is treated as subsidiary.
c. Controlling
When a company purchases an investment ranging from 20 % to 50 % of ownership and that gives a significant control to the investor over the investee.
When a company has significant control over the other company in case, it is treated as controlling company.
The mentioned terms have been discussed.
To complete:
The descriptions by filling in the blanks using the terms given.

Want to see the full answer?
Check out a sample textbook solution
Chapter 15 Solutions
Connect 2-Semester Access Card for Fundamental Accounting Principles
- A company's retained earnings increase when:A. Dividends are paidB. The company incurs a net lossC. New shares are issuedD. The company earns net incomearrow_forwardThe matching principle requires:A. Revenues to be recorded when cash is receivedB. Expenses to be recognized when incurred, matched with revenuesC. Assets to be recorded at market valueD. Liabilities to be recorded only when paid i need carrow_forwardThe financial statements of Dobson Company appear below: DOBSON COMPANY Comparative Balance Sheet December 31, Assets Cash Short-term investments Accounts receivable (net). Inventory.... Property, plant and equipment (net). Total assets Liabilities and stockholders' equity Accounts payable.. Short-term notes payable. Bonds payable. Common stock. Retained earnings. Total liabilities and stockholders' equity. Net sales Cost of goods sold Gross profit. Expenses Administrative expenses Selling expenses Interest expense... Total expenses. Income before income taxes Income tax expense. Net income... Additional information: DOBSON COMPANY Income Statement For the Year Ended December 31, 2019 2019 P 35,000 2018 P 40,000 15,000 60,000 50,000 30,000 50,000 70,000 250,000 P400,000 300,000 P500,000 P 10,000 40,000 88,000 P 30,000 90,000 160,000 160,000 145,000 102,000 75,000 P400,000 P500,000 P360,000 198,000 162,000 P59,000 40,000 12,000 111,000 51,000 15,000 P 36,000 a. Cash dividends of P9,000…arrow_forward
- The matching principle requires:A. Revenues to be recorded when cash is receivedB. Expenses to be recognized when incurred, matched with revenuesC. Assets to be recorded at market valueD. Liabilities to be recorded only when paidarrow_forwardA contra-asset account has what type of balance?A. DebitB. CreditC. ZeroD. Variableneed helparrow_forwardWhich of the following is not a current asset?A. InventoryB. Prepaid InsuranceC. Accounts PayableD. Cashneed helparrow_forward
- Which of the following is not a current asset?A. InventoryB. Prepaid InsuranceC. Accounts PayableD. Casharrow_forwardDepreciation is recorded in the books to:A. Allocate the cost of an asset over its useful lifeB. Estimate the resale value of assetsC. Track market valueD. Match expenses with liabilities need helparrow_forwardDepreciation is recorded in the books to:A. Allocate the cost of an asset over its useful lifeB. Estimate the resale value of assetsC. Track market valueD. Match expenses with liabilitiesarrow_forward
- A contra-asset account has what type of balance?A. DebitB. CreditC. ZeroD. Variablei need helparrow_forwardA contra-asset account has what type of balance?A. DebitB. CreditC. ZeroD. Variablearrow_forwardUnearned revenue is classified as:A. An expenseB. An assetC. A liabilityD. Equity need helparrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





