If the Equity Method Is Used to Account for an Investment

question 97

Multiple Choice

If the equity method is used to account for an investment in common shares

• A)it is presumed that the investor has no significant influence on the investee.
• B)net income of the investee is ignored by the investor.
• C)net income of the investee is recorded as realized gains, but dividends received are credited to the investment account.
• D)the investment account may be at times greater than the acquisition cost.

---

Definitions:

Tropical Rain Forests

Dense, rain-soaked forests found near the equator, characterized by high biodiversity and a canopy structure, receiving an abundance of rainfall throughout the year.

Earth's Land Area

The total surface area of the Earth that is not covered by water, including continents and islands.

Terrestrial Plants

Plants that grow on land rather than in water or air, playing crucial roles in ecosystems by producing oxygen and providing food and habitat for other organisms.

Canada's Forests

The diverse and extensive forested areas in Canada, known for their ecological importance and economic contributions, especially in lumber and paper production.