When Is the Equity Method Not Used to Account for a Long-Term

question 58

Multiple Choice

When is the equity method not used to account for a long-term investment in common stock?

• A)When the investment is 30% of the voting stock and significant influence can be achieved.
• B)When the investment is 15% and significant influence can be achieved.
• C)When the investment is greater than 50% of the voting stock and control is achieved.
• D)When the investment is 40% of the voting stock and significant influence can be achieveD.The investment must be 50% or less of the voting stock and the ability to exert significant influence must exist.

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Definitions:

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