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:

Broca's Area

An area situated in the dominant hemisphere's frontal lobe, associated with the production of speech.

Wernicke's Area

A region of the brain associated with the comprehension of language, located in the posterior section of the superior temporal gyrus in the dominant hemisphere.

Language Comprehension

The ability to understand spoken, written, or signed language.

Speech Production

The process by which humans produce sounds that combine to form language, involving respiratory, phonatory, articulatory, and neural mechanisms.