Under the Equity Method,the Investor ________

question 103

Multiple Choice

Under the equity method,the investor ________.

• A) must debit the Equity Investments account when a dividend is received
• B) must record its share of the investee's net income
• C) must use the LIFO method for tax purposes
• D) debits the Revenue from Investments when the investee reports income

---

Definitions:

Deadweight Loss

An economic inefficiency that occurs when the total welfare in a market is not maximized, resulting from distortions such as taxes, subsidies, or monopolies.

Excise Tax

A tax imposed on specific goods, services, or activities, often included in the price of products like tobacco, alcohol, and fuel, designed to discourage their use or generate revenue.

Perfectly Inelastic

A market condition where demand does not change regardless of changes in price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.