The Income from an Equity Method Investee Is Reported on One

question 8

Multiple Choice

The income from an equity method investee is reported on one line of the investor company's income statement except when

• A)the cost method is used.
• B)the investee has extraordinary items.
• C)the investor company is amortizing cost-book value differentials.
• D)the investor company changes from the cost to the equity method.

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Definitions:

Scoured

Describes the effect of being worn down or cleaned by fast-moving water or other fluids, often related to geological surfaces.

Permafrost

A condition in which water in the uppermost part of the ground remains frozen all or most of the time.

Ground

The solid surface of the Earth, where various geological and biological processes occur.

Drumlins

streamlined, elongated hills formed by glacial action, made of till and shaped like inverted spoons.