A Gain or Loss on Sale of a Long-Term Investment

question 86

Multiple Choice

A gain or loss on sale of a long-term investment using the equity method is determined by comparing the cash received with the:

• A) cost of the long-term investment
• B) market value of the long-term investment
• C) cost of the long-term investment adjusted for the investor's share of the investee's net income and cash dividends while the investment was held by the investor company
• D) lower-of-cost-or-market value of the long-term investment

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Definitions:

Joint Statement

An official declaration or announcement issued together by two or more parties, typically by governments or organizations.

Panic of 1819

The first major peacetime financial crisis in the United States, followed by a general collapse of the American economy lasting until 1821.

Causes

The reasons or motivations that lead to specific events or outcomes, often studied in historical, social, and scientific contexts.

Consequences

Outcomes or results that follow from actions, events, or decisions.