A Company Should Always Use the Equity Method to Account

question 87

Multiple Choice

A company should always use the equity method to account for an investment if:

• A) It has the ability to exercise significant influence over the operating policies of the investee.
• B) It owns 30% of another company's stock.
• C) It has a controlling interest (more than 50%) of another company's stock.
• D) The investment was made primarily to earn a return on excess cash.
• E) It does not have the ability to exercise significant influence over the operating policies of the investee.

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Definitions:

Clientelling

A sales technique that involves creating long-term relationships with customers by providing personalized service and attention.

Personalized Shopping Experience

Tailored shopping engagements that cater to the individual preferences and behaviors of customers.

Individual Customers

Consumers who purchase goods and services for their personal use rather than for resale or organizational needs.

Breach Of Security

An incident that results in unauthorized access or damage to information systems, potentially compromising confidential, sensitive, or protected information.