Which of the Following Accounting Methods Is Used to Account

question 103

Multiple Choice

Which of the following accounting methods is used to account for controlling interest investments?

• A)equity method
• B)acquisition method
• C)consolidation method
• D)discounted cash flow method

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Definitions:

Market Price

The rate currently set for the trade of assets or services in the marketplace.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Common Stock Account

An equity account that represents the ownership interests of common shareholders in a corporation, reflecting the invested capital and retained earnings.

Reverse Stock Split

A reverse stock split is a consolidation of shares that decreases the total number of outstanding shares and increases the share price proportionately.