A Company Has Been Using the Fair-Value Method to Account

question 79

Multiple Choice

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly influence the investee and the equity method has been deemed appropriate. Which of the following statements is true?

• A) A cumulative effect change in accounting principle must occur.
• B) A prospective change in accounting principle must occur.
• C) A retrospective change in accounting principle must occur.
• D) The investor will not receive future dividends from the investee.
• E) Future dividends will continue to be recorded as revenue.

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Definitions:

Effortful Control

The ability to regulate one's emotions, attention, and behavior through effort, especially in challenging situations.

Emotional Reactivity

The extent to which an individual responds to stimuli or situations with emotional responses, such as anger, happiness, or sadness.

Conscience-Oriented Behavior

Actions guided by one's internal moral compass or sense of right and wrong.

Character Education

An educational approach that focuses on developing positive moral qualities and values such as honesty, kindness, responsibility, and respect in students.