If the Cost Method Is Used to Account for a Long-Term

question 41

Multiple Choice

If the cost method is used to account for a long-term investment in common stock

• A) it is presumed that the investor has significant influence on the investee.
• B) the earning of net income by the investee is considered a proper basis for recognition of income by the investor.
• C) net income of the investee is not considered earned by the investor until dividends are declared by the investee.
• D) the Investment account may be at times greater than the acquisition cost.

---

Definitions:

Cultural Shift

A significant change in the way a society views, behaves, or values certain aspects of life, often occurring over time.

Eligible To Vote

Having the legal right to participate in the electoral process, typically based on criteria like age, citizenship, and absence of legal incapacitation.

Adult White Men

Historically, this group held the majority of rights and privileges in many societies, including voting and land ownership, while other groups were often marginalized.

United States

A country in North America consisting of 50 states, a federal district, five major self-governing territories, and various possessions.