For Each of the Following Numbered Situations Below, Select the Best

question 118

Essay

For each of the following numbered situations below, select the best letter answer concerning accounting for investments:
(A.) Increase the investment account.
(B.) Decrease the investment account.
(C.) Increase dividend revenue.
(D.) No adjustment necessary.
(1.) Income reported by 40% owned investee.
(2.) Income reported by 10% owned investee.
(3.) Loss reported by 40% owned investee.
(4.) Loss reported by 10% investee.
(5.) Change from fair-value method to equity method. Prior income exceeded dividends.
(6.) Change from fair-value method to equity method. Prior income was less than dividends.
(7.) Change from equity method to fair-value method. Prior income exceeded dividends.
(8.) Change from equity method to fair-value method. Prior income was less than dividends.
(9.) Dividends received from 40% investee.
(10.) Dividends received from 10% investee.
(11.) Purchase of additional shares of investee.
(12.) Unrealized ending intra-entity inventory profits using the equity method.

---

Definitions:

Bioaccumulation

Bioaccumulation is the process by which certain toxic substances (such as heavy metals or DDT) accumulate in an organism, often reaching harmful levels.

Biological Magnification

The method through which the levels of harmful compounds accumulate progressively in each subsequent level of the food chain.

Persistence

A characteristic of certain chemicals that are extremely stable and may take many years to be broken down into simpler forms by natural processes.

Nitrogen Cycle

A biogeochemical cycle that describes the transformations of nitrogen and nitrogen-containing compounds in nature, involving processes like fixation, nitrification, and denitrification.