The Equity Method of Accounting for Long-Term Equity Investments Is

question 74

Multiple Choice

The equity method of accounting for long-term equity investments is typically used when:

• A)less than 20% of the investee company is owned.
• B)between 20% and 50% of the investee company is owned.
• C)over 50% of the investee company is owned.
• D)any amount over 20% is acquired.

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Definitions:

Organic Combination

A natural or seamless integration or union of elements, substances, or components.

Oxygen

A colorless, odorless, tasteless gas found in the air; chemical symbol, O2.

Binge

A spree; to overindulge, such as with alcohol or food.

Overindulge

To engage excessively in an activity or consumption, typically eating, drinking, or other forms of pleasure, to a degree that may be harmful.