Which Statement Is Correct

question 5

Multiple Choice

Which statement is correct?

• A) Of the three possible variations of equity accounting, cost based equity normally shows the lowest carrying amount for the investment in the associates accounts
• B) Equity accounting requires that unrealised profits and losses on inter-company transactions between the investor and the investee be eliminated
• C) Of the three possible variations of equity accounting the pure equity method shows the highest share of profit of the associate because it includes as income the share of revaluations by the investee
• D) All of the statements are correct

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Definitions:

Surplus II

An additional amount of a resource, product, or service that exceeds the amount demanded or utilized.

Consumer Surplus

The discrepancy between what consumers are willing to spend on a good or service and their actual expenditures.

Surplus II

An excess of supply over demand in the market, leading to excess goods and potential lower prices.

Consumer Surplus

The separation between the entire amount consumers are keen and financially able to expend on a good or service, and the amount they actually expend.