If the Equity Method Is Used to Account for an Investment

question 128

Multiple Choice

If the equity method is used to account for an investment in common shares

• A) it is presumed that the investor has no significant influence on the investee.
• B) net income of the investee are ignored by the investor.
• C) net income of the investee are recorded as realized gains, but dividends received are credited to the investment account.
• D) the investment account may be at times greater than the acquisition cost.

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