If an Investor Company Owns 35% of the Common Stock

question 14

Multiple Choice

If an investor company owns 35% of the common stock of another business,the investor:

• A)receives 35% of the investee's net income in cash.
• B)reports the Equity-method Investment Revenue on the balance sheet.
• C)records dividends received as investment revenue.
• D)increases its Equity-method Investment account for 35% of net income reported by the investee company.

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Definitions:

Foreign Corporation

A corporation incorporated in one state doing business in another state. See also alien corporation.

Conditional Indorsements

Endorsements made on a negotiable instrument that specify certain conditions that must be met before the endorsement is considered valid.

Effective

Producing a desired or intended result, often used in contexts relating to efficiency, productivity, or the power to produce a specified effect.

Payee

The individual or entity to whom a payment is directed or owed.