Which of the Following Statements Regarding the Accounting for an Investment

question 78

Multiple Choice

Which of the following statements regarding the accounting for an investment using the equity method is incorrect?

• A) Investment income equals the proportionate share of investee dividends.
• B) It is used for investments between 20 - 50% of the outstanding voting stock when the investor has the ability to exert significant influence.
• C) The investment account is increased by the proportionate share of investee net income.
• D) The investment account is decreased by the proportionate share of investee dividends.

---

Definitions:

Parallel Processing

The ability of the brain to simultaneously process incoming stimuli of differing quality, a fundamental mechanism underlying human thought and reasoning.

Dual Processing

The principle that our minds operate using two distinct systems for processing information: unconscious, automatic processing and conscious, deliberate processing.

Selective Attention

The cognitive process of focusing on a specific aspect of information while ignoring other perceivable information.

Change Blindness

A phenomenon where an observer fails to notice significant changes in a visual scene, indicating the selective aspects of visual perception.