Which of the Following Statements Is (Are) TRUE

question 20

Multiple Choice

Which of the following statements is (are) TRUE?

• A) I, II, and III
• B) II and III
• C) III
• D) II

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Definitions:

Partial Equity Method

An accounting technique used when an investing company does not have significant influence over the investee but still wants to record its investment's profit and loss proportionately.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence, typically reflected by owning 20%-50% of voting stock.

Acquisition Method

A set of procedures used in accounting to consolidate the financial statements of a parent company and its subsidiaries.

Consolidated Revenues

The total earnings generated by a company and its subsidiaries, reported together as a single figure.