A Company Has Been Using the Fair-Value Method to Account

question 39

Multiple Choice

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly control the investee and the equity method has been deemed appropriate. Which of the following statements is true?

• A) A cumulative effect change in accounting principle must occur.
• B) A prospective change in accounting principle must occur.
• C) A retrospective change in accounting principle must occur.
• D) The investor will not receive future dividends from the investee.
• E) Future dividends will continue to be recorded as revenue.

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Definitions:

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical behavior of a sexual nature that affects an individual's employment or creates a hostile environment.

Repeated Unwanted

Continuous occurrences of undesirable or unpleasant actions or events that persist despite efforts to stop them.

Deliberate

Done consciously and intentionally, often after careful thought or as a result of a decision.

Bacterial Infection

An invasion of the body by harmful bacteria, which can cause diseases and conditions, ranging from mild to life-threatening.