Which of the Following Statements Concerning the Equity Method Is

question 67

Multiple Choice

Which of the following statements concerning the equity method is true?

• A)The equity method is used to account for investments in other companies when the investor purchases less than 20% of the voting shares of the investee.
• B)The adjustments made using the equity method are the same as those when consolidated financial statements prepared, except the effect is summarized in a single line.
• C)The investment account on the balance sheet will reflect the market value of the investee.
• D)The investment income account on the income statement is a good predictor of future dividends to be received.

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Definitions:

Seismic Recording Stations

Facilities equipped with sensitive instruments used to detect and record earthquakes and other ground vibrations.

Interferogram

The combining of satellite mapping images taken of a place at two different times to compare changes in the land surface, for example, during an earthquake.

Seismograms

Records produced by a seismograph that visually represent the vibrations of the earth, used to analyze and interpret seismic activity.

Flood Areas

Regions that are prone to flooding due to their geographical location near water bodies or due to poor drainage.