If an Investor Owns Less Than 20% of the Common

question 16

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)the investor has a controlling interest in the investee.
• C)the investor usually has little or no influence on the investee.
• D)the investor has significant influence on the investee.