If an Investor Owns Less Than 20% of the Ordinary

question 101

Multiple Choice

If an investor owns less than 20% of the ordinary shares of another corporation as a long-term 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:

Infidelity

The act of being unfaithful or violating the trust in a committed relationship or marriage through sexual or emotional relationships with someone else.

Co-Custody

A situation where two parties share legal responsibility and authority for the care and upbringing of a child.

Physical And Legal Custody

Terms that refer to the physical residence of a child and the legal right to make decisions regarding the child's upbringing, respectively.

Custody

A court-mandated ruling regarding which divorced parent will have the primary responsibility for the children’s upbringing.