For Each Transaction Numbered 1 Through 4 Below, Identify Which $\quad$

question 50

Essay

For each transaction numbered 1 through 4 below, identify which effect (a through f) the transaction is most likely to cause. You may use each letter more than once or not at all.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Effects }$
a. Increase in current ratio and earnings per share
b. Decrease in current ratio and earnings per share
c. Does NOT change the current ratio; increases earnings per share
d. Increasesthe current ratio; does NOT change earnings per share
e. Does not change the current ratio or earnings per share
f. Can't determine the effert
_____ 1. The mark-to-market method is used for an investment in long-term equity securities, and the investee company declares a cash dividend.
_____ 2. The equity method is used for an investment in long-term equity securities and the investee company declares a cash dividend.
_____ 3. The mark-to-market method is used for an investment in long-term equity securities and the investee company recognizes net income.
_____ 4. The equity method is used for an investment in long-term equity securities and the investee company recognizes net income.

---

Definitions:

Scatterplot

A graphical representation of data using Cartesian coordinates to display values for two variables for a set of data, revealing any correlations between them.

Scatterplot

A visual diagram that illustrates the connection between two numerical variables.

Quantitative Variables

Variables that express numerical amounts, with meaningful mathematical operations possible on their values.

Covariance

A statistical measure indicating the direction of the linear relationship between two variables; can be positive, negative, or zero.