Which One of the Following Statements Is False

question 18

Multiple Choice

Which one of the following statements is false?

• A) Under the equity method, revenue is recognized when net income is earned by the associate.
• B) When the equity method is used to account for an investment in shares, dividends received are accounted for as a reduction in the investment account.
• C) Under the equity method, the investment account is adjusted annually for a portion of associate's net income and for dividends received.
• D) Under the equity method, revenue is recognized when net income is earned by the investor which may not be when it is earned by the investee.

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Definitions:

Activity

The state of being active, engaged, or involved in actions or tasks, often measured in studies of behavior or productivity.

Increases

A rise or growth in quantity, size, or number.

Temperament

An individual's innate disposition or natural mood pattern, which influences their behavior and interactions with others.

Genetically Based

Traits or conditions determined by genes inherited from one's parents.