Under the Equity Method,if the Investee Company Has a Net

question 131

Multiple Choice

Under the equity method,if the investee company has a net loss,then the investor company will:

• A)debit the Equity-Method Investment account for their share of the net loss.
• B)credit the Unrealized Loss on Equity-Method Investment account for their share of the net loss.
• C)credit the Equity-Method Investment account for their share of the net loss.
• D)debit the Unrealized Loss on Equity-Method Investment.

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Definitions:

Elasticity

The measure of how much the quantity demanded or supplied of a product changes in response to a change in its price.

Resource Demand

The desire and ability of businesses or individuals to acquire resources or inputs required to produce goods and services.

Resource Price

Resource price is the cost associated with acquiring the inputs needed for production, including labor, raw materials, and capital.

Derived Demand

The demand for a factor of production or intermediate good that occurs as a result of demand for the final good or service.