If an Investor Owns Less Than 20% of the Common

question 6

Multiple Choice

If an investor owns less than 20% of the common stock of another company as a long-term investment:

• A) the equity method of accounting should be used for the investment.
• B) no dividends are expected to be received.
• C) the investor usually has little or no influence on the investee.
• D) the investor has significant influence on the investee.

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