Omar Corporation Uses the Equity Method to Account for Its

question 58

Multiple Choice

Omar Corporation uses the equity method to account for its 25% investment in Limpit Corporation and receives $15,000 in dividends. How should Omar account for these dividends?

• A)A decrease in the investment.
• B)An increase in income.
• C)A decrease in income.
• D)An increase in assets.

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Definitions:

Numerator

The top number in a fraction that represents the part of the whole being considered or counted.

Denominator

The bottom number in a fraction that represents the total number of equal parts the whole is divided into.

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without breaking any constraints, often associated with statistical calculations.

F-distribution

A probability distribution used in statistics to model the ratio of variances among variables, often utilized in the analysis of variance (ANOVA).