Each Transaction Listed in 1 Through 4 Relates to an Investment

question 103

Essay

Each transaction listed in 1 through 4 relates to an investment in a long-term equity security. Place the letter that corresponds to the effect (a through h) the transaction has on the accounting equation in the space provided. You may use each letter more than once or not at all.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Accounting Effects
a. $+A$ and $+L$
b. $+\mathrm{A}$ and $+\mathrm{SE}$ (Contributed Capital)
c. $+\mathrm{A}$ and $+\mathrm{SE}$ (Retained Earnings)
d. $-A$ and $-L$
e. $-\mathrm{A}$ and $-\mathrm{SE}$ (Contributed Capital)
f. $-A$ and - SE (Retained Earnings)
g. $+\mathrm{A}$ and $-\mathrm{A}$
$\mathrm{h}$ . The event is not reported on financial statements.
____ 1. Under the mark-to-market method, the investee company declares a cash dividend.
____ 2. Under the equity method, the investee company declares a cash dividend.
____ 3. Under the mark-to-market method, the investee company recognizes net income.
____ 4. Under the equity method, the investee company recognizes net income.

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Definitions:

Epithelium

a layer of cells forming the epidermis of the skin and the surface layer of mucous and serous membranes, playing roles in protection, secretion, and absorption.

Flat Cells

Cells that are flattened in shape, often found lining surfaces such as the skin or blood vessels, contributing to the formation of epithelial tissues.

Epithelial Tissue

Epithelial tissue is a layer of cells that forms the outer covering of the body and the lining of internal organs and structures, serving protective, absorptive, and secretory functions.

Bacterial Invasion

The process by which bacteria enter, colonize, and multiply within a host organism.