If One Company Owns More Than 20% of the Shares

question 1

Multiple Choice

If one company owns more than 20% of the shares of another company and the shares are being held as a long-term investment,which method would normally be used to account for this investment?

• A)Equity
• B)Fair value
• C)Historical cost
• D)Straight-line
• E)Effective

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Definitions:

Revenue And Spending Variances

Differences between the actual and budgeted amounts on both the revenue side and the expenditure side, indicating the financial performance over a certain period.

Customers Served

The number of customers that have been provided with products or services by a business during a specific time period.

Planning Budget

A budget created for a specific level of activity; it helps management set financial targets and evaluate performance.

Customers Served

refers to the number or segment of clients to whom a business has provided products or services within a specific period.