When Is the Equity Method Used to Account for Long-Term

question 57

Multiple Choice

When is the equity method used to account for long-term investments in common stock?

• A) When the investment is between 20% and 50% of the voting stock, regardless of whether or not significant influence can be achieved.
• B) When the investment is greater than 50% of the voting stock, regardless of whether or not significant influence can be achieved.
• C)When the investment is greater than 50% of the voting stock and significant influence can be achieved.
• D)When the investment is between 20% and 50% of the voting stock and significant influence can be achieveD.The investment must be between 20% and 50% of the voting stock and significant influence must be achieved.

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Definitions:

Creativity

The ability to generate new and original ideas, solutions, or products.

Tradition

The transmission of customs or beliefs from generation to generation, or the fact of being long established.

Scapegoat

An individual or group unfairly blamed for problems or negative outcomes, often as a means of deflecting responsibility or criticism from others.

Mascot

A character or symbol used to represent a group, organization, or team, often meant to bring luck.