If the Cost Method Is Used to Account for a Long-Term

question 136

Multiple Choice

If the cost method is used to account for a long-term investment in ordinary shares,

• A) it is presumed that the investor has significant influence on the investee.
• B) the earning of net income by the investee is considered a proper basis for recognition of income by the investor.
• C) net income of the investee is not considered earned by the investor until dividends are declared by the investee.
• D) the Investment account may be, at times, greater than the acquisition cost.

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Definitions:

Heterosexuality

Is the preference for members of the opposite sex as sexual partners.

Sexual Partners

Individuals with whom someone engages in sexual activities.

Heteronormativity

denotes a cultural bias favoring heterosexuality and presuming distinct, complementary gender roles for men and women as normative.

Settling Down

The process of establishing a more stable and permanent lifestyle, often involving securing long-term housing and employment.