For Accounting Purposes,the Method Used to Account for Long-Term Investments

question 58

Multiple Choice

For accounting purposes,the method used to account for long-term investments in common stock is determined by:

• A)the size of the investor.
• B)the size of the investor when compared to the size of the investee.
• C)vote by the Board of Directors of the investor.
• D)the investor's percentage ownership of the investee's stock.

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Definitions:

Investment Spending

Expenditures on capital goods used to produce goods and services in future periods.

Recessions

Periods of economic decline during which trade and industrial activity are reduced, identified by a fall in GDP in two successive quarters.

Aggregate-Demand Curve

A graphical representation showing the relationship between the overall price level in the economy and the total demand for goods and services.

Aggregate Demand

The total demand for all goods and services in an economy at a given overall price level and time.