If a Company Owns More Than 20% of the Stock

question 146

Multiple Choice

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment,which method would the investor normally use to account for this investment?

• A)Equity method
• B)Market value method
• C)Historical cost method
• D)Straight-line method
• E)Effective method

---

Definitions:

Job Enrichment

Enhancing a job by adding more meaningful tasks and duties to make it more rewarding and satisfying.

Acquired Needs Theory

a psychological theory that suggests human needs are developed over time based on life experiences.

Motivator-hygiene Theory

A theory stating that certain factors in the workplace cause job satisfaction (motivators), while a separate set of factors cause dissatisfaction (hygiene factors).

Hygiene Factors

Factors associated with job dissatisfaction, such as salary, company policies, and working conditions, according to Herzberg's Two-Factor Theory.