The Available-For-Sale(fair Value)method of Accounting for Long-Term Investments in Stock

question 39

Multiple Choice

The available-for-sale(fair value) method of accounting for long-term investments in stock should be used when the:

• A)investor owns less than 20% of the outstanding stock of the investee.
• B)investor has significant influence over the investee's operating decisions and policies.
• C)investor has little or no influence on the investee.
• D)A and C.

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Definitions:

Gold Rush

A rapid movement of people to an area where gold has been discovered, with significant historical occurrences in the United States, Australia, and South Africa.

Prospectors

Individuals who search for mineral deposits, particularly gold and silver, often during historical gold rushes.

California

A state located on the west coast of the United States, known for its diverse geography, significant economic contributions, and cultural influence.