Which One of the Following Is True of the Equity

question 25

Multiple Choice

Which one of the following is true of the equity method?

• A)The income recognized by the investor is based on the percentage of stock ownership and the amount of earnings reported by the investee.
• B)Market value adjustments are made at yearend.
• C)The receipt of dividends increases net income on the investor's financial statements.
• D)The percent of ownership must be greater than 50% to apply this method.

---

Definitions:

Procurement Process

The series of activities undertaken by an organization to acquire goods or services.

Iron Ore

A rock or mineral from which iron can be extracted for commercial use, typically the primary input in steelmaking.

Sourcing Decision

The process of selecting suppliers to provide goods or services needed by a business.

Supply Chain

The sequence of processes involved in the production and distribution of a commodity, from raw materials to delivery of the finished product to the consumer.