Barnum Company Owns an Investment and Uses the Equity Method

question 22

True/False

Barnum Company owns an investment and uses the equity method of accounting.Under the equity method of accounting,Barnum would decrease the Investment account for the proportionate share of the affiliate's reported net loss.

---

Definitions:

Bilateral Contract

A contract in which the promise of one of the parties forms the consideration for the promise of the other.

Unilateral Contract

A contract where one party makes a promise in exchange for an act by the other party.

Quasi-contract

A quasi-contract is a legal concept where the court imposes a contract-like obligation on a party to prevent unjust enrichment, even though no actual agreement exists between the parties.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.