Under the Equity Method, a Company Should Report an Unrealized

question 176

Multiple Choice

Under the equity method, a company should report an unrealized gain on a long-term investment:

• A) when the market price is greater than cost.
• B) when the market price is less than cost.
• C) if the investee stock has fallen below the investors cost.
• D) in no instance. No adjusting entry is made.

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Definitions:

Patch

A small application designed to update or fix problems with a software program or an operating system.

Ointment

A form of topical drug; also known as a salve.

Salve

A medicinal ointment used to soothe the skin or heal wounds.

Intradermal Injection

A method of administering medication by injection into the dermis, just below the skin.