All of the Following Are Acceptable Methods to Account for a Majority-Owned

question 102

Multiple Choice

All of the following are acceptable methods to account for a majority-owned investment in subsidiary except

• A) The equity method.
• B) The initial value method.
• C) The partial equity method.
• D) The fair-value method.

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Definitions:

Semiannually

Occurring twice a year or every six months.

Bond Premium

The amount by which the market value of a bond exceeds its principal amount or par value, typically occurring when the bond's interest rate is higher than current market rates.

Straight-Line Method

A depreciation method that allocates an equal portion of the cost of a fixed asset to each accounting period over its useful life.

Amortization

The process of gradually reducing the cost of an intangible asset through scheduled periodic payments over its useful life.