A Company Using the Equity Method to Account for Long-Term

question 138

Multiple Choice

A company using the equity method to account for long-term investments should report an unrealized gain on the investment:

• A)if the investee stock has fallen below or risen above its cost to the investor.
• B)only if market exceeds cost.
• C)only if market is below cost.
• D)in no instance. No adjusting entry is made.