If 10% of the Ordinary Shares of an Investee Company

question 11

Multiple Choice

If 10% of the ordinary shares of an investee company is purchased as a long-term investment, the appropriate method of accounting for the investment is

• A) the cost method.
• B) the equity method.
• C) the preparation of consolidated financial statements.
• D) determined by agreement with whomever owns the remaining 90% of the shares.

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Definitions:

Three-fifths Compromise

was a constitutional agreement that each slave would count as three-fifths of a person for population representation and taxation purposes.

White Supremacist

An ideology that promotes the belief that white people are superior to those of all other races, especially the black race, and should therefore dominate society.

Ku Klux Klan

A white supremacist group that emerged in the post-Civil War United States, advocating for white dominance and known for violent racist acts.

Southern Homestead Act

A United States federal law enacted in 1866 to provide land to freed African American slaves and loyal white Southerners.