What Method of Accounting Will Generally Be Used When One

question 25

Multiple Choice

What method of accounting will generally be used when one company purchases less than 20% of the outstanding stock of another company?

• A)Only the fair value method may be used.
• B)Only the equity method may be used.
• C)Either the fair value method or the equity method may be used,depending upon the relationship between the companies.
• D)Neither the fair value method nor the equity method may be used,regardless of the level of ownership.

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Definitions:

Expression

A combination of symbols that represent a quantity or formula, which can include numbers, variables, and operation symbols.

Solve

To find the value(s) of variable(s) that satisfy an equation, inequality, system of equations, or other mathematical conditions.

Expression

A combination of symbols and operators in mathematics that represents a value.

Radical Equation

An equation in which the unknown variable appears under a radical sign, requiring specific methods to isolate and solve.