Which of the Following Results in an Increase in the Equity

question 64

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) Sale of a portion of the investment at a gain to the investor.
• D) Investor's share of gross profit from intra-entity inventory sales for the prior year.
• E) Sale of a portion of the investment at a loss.

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Definitions:

Market

A place or mechanism through which buyers and sellers interact to trade goods, services, or assets, facilitating the determination of prices and the exchange of ownership.

Price Elasticity

An indicator of the sensitivity of consumer demand for a product to variations in its price, reflecting how significantly the amount of the product consumers want to buy alters with price adjustments.

Raise Profits

Strategies or actions undertaken by a firm to increase the difference between its total revenues and total costs.

Two-part Tariff

A pricing strategy that consists of two parts: a fixed fee plus a variable charge based on the quantity of the product or service used.