If an Investor Owns Less Than 20% of the Common

question 46

Multiple Choice

If an investor owns less than 20% of the common stock of another corporation as an investment

• A) the equity method of accounting for the investment should be employed.
• B) no dividends can be expected.
• C) it is presumed that the investor has relatively little influence on the investee.
• D) it is presumed that the investor has significant influence on the investee.

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Definitions:

Payroll

The total amount of money that a company pays to its employees, including wages, salaries, bonuses, and deductions.

Ethical Behaviour

Acting in ways that are consistent with societal and professional standards of conduct, including honesty, fairness, and integrity.

Clothing Factory

A manufacturing facility specializing in the production of garments and textiles, often involving assembly line methods for mass production.

Social Factor

An element that influences societal behavior and interactions, including beliefs, values, culture, and economic status.