Which of the Following Results in an Increase in the Equity

question 61

Multiple Choice

Which of the following results in an increase in the Equity in Investee Income account when applying the equity method?

• A) Amortizations of purchase price over book value on date of purchase.
• B) Amortizations, since date of purchase, of purchase price over book value on date of purchase.
• C) Extraordinary gain of the investor.
• D) Unrealized gain on intra-entity inventory transfers for the prior year.
• E) Sale of a portion of the investment at a loss.

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Definitions:

Reorder Point

The inventory level at which an order should be placed to replenish stock before it reaches a critically low level or runs out.

Types Of Inventory

Types Of Inventory categorize stock into various forms such as raw materials, work-in-progress, and finished goods, each serving different roles in production and sales processes.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, including costs related to ordering processing, transport, and receiving.

Carrying Costs

Expenses associated with holding or storing inventory over a certain period, including warehousing, insurance, and spoilage costs.