Which of the Following Statements Is TRUE Regarding the Equity

question 6

Multiple Choice

Which of the following statements is TRUE regarding the equity method?

• A) The equity method is used for reporting gains or losses for non-strategic investments.
• B) The investor's share of the associate's dividends declared is reported as revenue.
• C) The investor's investment in the associate changes in direct relation to the changes taking place in the associate's equity accounts.
• D) The equity method reports unrealized gains and losses on revaluations to fair value in net income.

---

Definitions:

Budget Constraint

The limitations on household consumption based on income and the prices of goods and services.

Utility Function

A mathematical representation of how a consumer derives satisfaction from consuming different quantities of goods and services.

Optimum Point

The most advantageous position or condition that can be achieved in a given circumstance or under certain parameters.

Frozen Yogurt

A dessert made from yogurt and sometimes other dairy products that is frozen and has a taste and texture similar to ice cream.