Under the Equity Method, If an Equity-Method Investment Is Sold

question 159

Multiple Choice

Under the equity method, if an Equity-method Investment is sold at a gain, the gain is:

• A)reported as operating revenue on the income statement.
• B)reported on the balance sheet as an adjustment to accumulated other comprehensive income.
• C)reported in the Other revenue and gain section of the income statement.
• D)reported as Other comprehensive income on the statement of comprehensive income.

---

Definitions:

Mutually Accountable

A condition or situation where two or more individuals or parties share responsibility for their actions and outcomes.

Individually Accountable

The principle that each member of a group or team must take responsibility for contributing their own effort and work towards the collective goal.

Task Interdependence

The degree to which tasks in an organization require coordination and collaboration among different roles or individuals to complete a composite task.

Individual Reward Structures

Systems designed to provide incentives or rewards to individuals based on their performance or achievement of specific goals.