If 15% of the Common Stock of an Investee Company

question 44

Multiple Choice

If 15% of the common stock of an investee company is purchased as a long-term investment,the appropriate method of accounting for the investment is:

• A)the equity method.
• B)the consolidation method.
• C)the fair value method.
• D)the lower of cost or market method.

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Definitions:

Scrotum

A pouch of skin containing the testicles and parts of the spermatic cords, playing a role in regulating their temperature.

Epididymis

A tightly coiled tube located at the back of the testicle where sperm matures.

Inguinal Hernia

A condition where soft tissue protrudes through a weak point in the abdominal muscles near the groin.

Abdominal Muscles

A group of muscles in the abdomen involved in the movement and support of the torso and important for posture and respiratory functions.