Which of the Following Statements Regarding the Accounting for an Investment

question 81

Multiple Choice

Which of the following statements regarding the accounting for an investment using the equity method is incorrect?

• A)It is used for investments between 20 - 50% of the outstanding voting stock when the investor has the ability to exert significant influence.
• B)The investment account is increased by the proportionate share of investee net income.
• C)The investment account is decreased by the proportionate share of investee dividends.
• D)Investment income equals the proportionate share of investee dividends.

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