Under the Equity Method, the Investor Recognizes as Income

question 36

Multiple Choice

Under the equity method, the investor recognizes as income:

• A) the dividends paid by the investee company
• B) the change in market value of investee company stock
• C) a portion of the income earned by the investee company
• D) All of these answers are correct.

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Definitions:

Uniform Commercial Code (UCC)

A statutory source of contract law in the United States that is applicable to transactions involving the sale of goods. The UCC was created in 1952 and adopted by all 50 states, the District of Columbia, and the Virgin Islands; it may be modified by each state to reflect the wishes of the state legislature.

Sellers/Lessors

Sellers or lessors are individuals or entities that provide goods or property for sale or lease to buyers or lessees, respectively.

Buyers/Lessees

Individuals or entities that purchase or lease goods and services.

Specific Performance

A legal remedy requiring a party to execute a contract according to its precise terms.