A Company That Acquires Less Than 20% Ownership Interest in Another

question 177

Multiple Choice

A company that acquires less than 20% ownership interest in another company should account for the share investment in that company using

• A) the cost method.
• B) the equity method.
• C) the significant method.
• D) consolidated financial statements.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a specific period accounting for changes in price level.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports, resulting in a net outflow of domestic currency to foreign markets.

Real GDP

Gross Domestic Product adjusted for inflation, which reflects the value of all goods and services produced by an economy in a given year in base-year prices.

Price Level

The average price point of the entirety of goods and services in the economic scope.