With the Equity Method, the Investor Recognizes Its Share of the Earnings

question 94

Multiple Choice

With the equity method, the investor recognizes its share of the earnings of the subsidiary when the

• A)investor sells the investment
• B)investee pays a cash dividend
• C)investee declares a cash dividend
• D)investee reports earnings on its income statement

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Definitions:

Power Base

The foundation of authority or influence an individual, group, or organization has, often derived from a combination of knowledge, relationships, and resources.

Reward

A benefit, recognition, or compensation given to an individual or group as a return for their performance, achievement, or service.

Coercive

Relating to or using force or threats to persuade someone to do something or comply with one's demands.

Expert

A person who possesses a high level of knowledge, skills, or expertise in a particular field or area.