The Equity Method of Accounting for an Investment Is Used

question 7

Multiple Choice

The equity method of accounting for an investment is used when a company purchases

• A) More than 20% of the debt securities of a second company.
• B) 100% of the debt securities of a second company.
• C) 15% of the equity securities of a second company.
• D) More than 20% of the equity securities of a second company.

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Definitions:

Real Per Capita Output

The amount of goods and services produced per person, adjusted for inflation, indicating the economic well-being of a country's citizens.

DVC

Digital Video Compression, a method for reducing the size of digital video files.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by the rise in the country's gross domestic product (GDP).

Industrially Advanced Countries

High-income countries such as the United States, Canada, Japan, and the nations of western Europe that have highly developed market economies based on large stocks of technologically advanced capital goods and skilled labor forces.