How Should a Permanent Loss in Value of an Investment

question 45

Multiple Choice

How should a permanent loss in value of an investment using the equity method be treated?

• A) The equity in investee income is reduced.
• B) A loss is reported in the same manner as a loss in value of other long-term assets.
• C) The investor's stockholders' equity is reduced.
• D) No adjustment is necessary.
• E) Record an offset to cash.

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Definitions:

Human Resource Functions

The various activities and responsibilities that HR departments undertake to manage an organization's workforce effectively.

Outsourcing

The practice of hiring third parties to perform services or create goods that were traditionally performed in-house, often to reduce costs or access specialized skills.

Competitors

Other businesses or individuals offering similar products or services in the same market, engaging in a rivalry to gain greater revenue, market share, or recognition.

Documenting

The process of systematically recording information, events, or processes, often for purposes of evidence, compliance, or record-keeping.