If a Company Owns More Than 20% of the Stock

question 12

Multiple Choice

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment,which method would the investor normally use to account for this investment?

• A)Equity method.
• B)Fair value method.
• C)Historical cost method.
• D)Cost with amortization method.
• E)Effective method.

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Definitions:

Surface Area

The total area that the surface of an object occupies, critical in various physical, chemical, and biological processes due to its role in interactions with the environment or other objects.

Parabronchi

Tubular structures within the lungs of birds through which air flows, allowing for efficient gas exchange during both inhalation and exhalation.

Anterior Air Sacs

Air-filled structures part of the avian respiratory system, located near the front of the bird's body, involved in the storage and movement of air through the lungs.

Spiracles

Openings on the body of some animals, such as insects and some fishes, for breathing.