When a Company Has Acquired a "Passive Interest" in Another

question 54

Multiple Choice

When a company has acquired a "passive interest" in another corporation, the acquiring company should account for the investment

• A) by using the equity method.
• B) by using the fair value method.
• C) by using the effective interest method.
• D) by consolidation.

---

Definitions:

Chapter 13

A type of bankruptcy in the United States that allows individuals with a regular income to develop a plan to repay all or part of their debts under the bankruptcy court's protection.

Complies

To act according to an order, set of rules, or request.

Applicable Law

The body of law or legal system that is relevant or utilized in a particular jurisdiction, case, or legal matter to determine the outcome.

Fraudulent Transfers

The illegal or unethical transfer of property to avoid debts or obligations to creditors.