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:

Institutional Setting

An environment or facility designed for specific purposes such as healthcare, education, or incarceration, where structured routines and regulations are in place.

Token Economy

A behavior modification method often used in therapeutic settings, where desired behaviors are rewarded with tokens that can be exchanged for various rewards.

Psychiatric Ward

A specialized hospital or section of a hospital providing care and treatment for people with mental illness.

Delusional Thinking

A mental state where a person holds beliefs that are contradicted by reality or rational argument, typically as a symptom of a mental disorder.