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

Parent-subsidiary Relationship

A corporate structure where one company (the parent) controls another company (the subsidiary) typically through ownership of a majority of its shares.

Partnership

A formal business enterprise where multiple individuals collaborate in management and profit distribution.

Cost Method

An accounting method where investments are recorded at their original purchase cost, without adjustment for increases or decreases in market value.