Which Statement Is Not Correct About the Equity Method

question 120

Multiple Choice

Which statement is not correct about the equity method?

• A)The investment account on the balance sheet equals the original cost plus the investor's share of the investee's post-acquisition changes in net assets.
• B)This method results in reflecting two legal entities as one economic unit for financial reporting purposes.
• C)Income is recognized equal to the investor's share of the investee's net income.
• D)Dividends from the investee are deducted from the investor's investment account.

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