The Method of Accounting for Subsidiaries Where Investment Income Is

question 30

Multiple Choice

The method of accounting for subsidiaries where investment income is limited to dividends received is the

• A)​cost method.
• B)​simple equity method.
• C)​investment method.
• D)​sophisticated equity method.

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Definitions:

Creditor

An entity (could be a person, organization, government body) to whom money is owed by the debtor for providing a loan, goods, or services on credit.

Bank Memos

Notices from a bank that make adjustments to a company's bank account balance, often for fees, interest payments, or corrections.

Bank Reconciliation

The analysis that details the items responsible for the difference between the cash balance reported on the bank statement and the balance of the cash account in the ledger.

Company's Accounts

Records that contain the financial transactions, assets, liabilities, and equity of a company.