Under the Equity Method, If the Investment Is Sold at a Gain

question 43

Multiple Choice

Under the equity method, if the Investment is sold at a gain, the gain is:

• A) reported as operating revenue.
• B) reported on the balance sheet as a long-term asset.
• C) reported in the Other Revenue section of the income statement.
• D) contributes to gross profit on the income statement.

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Definitions:

Horizontal Mergers

Mergers between companies that operate in the same industry or market level, often scrutinized for their potential to reduce competition.

Clayton Act

An antitrust law enacted in the United States to promote competition and prevent monopolies by prohibiting certain actions that could lead to anti-competitive practices.

Genetic Traits

Characteristics determined by genes inherited from parents, influencing an individual's physical and possibly behavioral attributes.

Alterations

Alterations refer to changes or modifications made to something, often to suit a particular purpose or improve it.