When the Cost Method Is Used to Account for an Equity

question 60

Multiple Choice

When the cost method is used to account for an equity investment, the carrying amount of the investment is affected by

• A)the net income of the investee.
• B)dividend distributions of the investee.
• C)both the net income and the dividend distributions of the investee.
• D)neither the net income nor the dividend distributions of the investee.

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Definitions:

Supreme Court

The highest federal court in the United States, serving as the ultimate arbiter of legal and constitutional disputes.

Segregation

The mandatory division of various ethnic groups within a nation, community, or institution.

Jim Crow

Laws and practices in the United States that enforced racial segregation and discrimination against African Americans from the late 19th century into the 1960s.

Thurgood Marshall

The first African American Justice of the U.S. Supreme Court, serving from 1967 to 1991, known for his advocacy for civil rights and his victory in Brown v. Board of Education.