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If the Shares of Stock Sold or Exchanged Are Not

question 132

True/False

If the shares of stock sold or exchanged are not specifically identified,the average cost method of identification must be used.


Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment is significant but not controlling.

Stock Investments Account

An account used to record the purchases and sales of equity securities, such as shares of stock, that a company holds as investments.

Annually

Occurring once every year or relating to a period of one year.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

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