Company B Has 40,000 Shares of Its Common Stock Outstanding

question 61

Multiple Choice

Company B has 40,000 shares of its common stock outstanding.Company A owns 5,000 shares of Company B stock.Company A should use the _____ method to account for its investment in Company B.

• A)market
• B)equity
• C)cost
• D)consolidated

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Definitions:

T-shirts

Casual garments made from fabric, typically short-sleeved and collarless, worn as informal wear or under clothing.

Rice

A cereal grain which is a staple food for a large part of the world's human population, especially in Asia.

World Price

The international market price of a good or service, influenced by global supply and demand conditions.

Domestic Supply

The total amount of goods and services provided by a country's own economy without importing from other countries.