Which of the Following Statements Is Incorrect in Regard to the Equity

question 48

Multiple Choice

Which of the following statements is incorrect in regard to the equity method of accounting for investments? The fair value option approach is not used.

• A) The investment account is increased by the percentage of the investee's net income.
• B) The investment account is decreased by the percentage of the investee's dividends declared.
• C) The investment account is adjusted to fair value at the end of the reporting period.
• D) The investment account is decreased by the percentage of the investee's net loss.

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Definitions:

Confirmation Bias

The inclination to seek out, understand, prefer, and remember data in a manner that validates one's existing beliefs or theories.

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The capacity to communicate smoothly in two languages.

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The process through which a person learns a language other than their native language, often through formal education or immersion.

Additive Strategy

A problem-solving approach that involves combining different strategies or elements in order to achieve a solution.