Which One of the Following Varies Between the Equity, Initial

question 121

Multiple Choice

Which one of the following varies between the equity, initial value, and partial equity methods of accounting for an investment?

• A) the amount of consolidated net income.
• B) total assets on the consolidated balance sheet.
• C) total liabilities on the consolidated balance sheet.
• D) the balance in the investment account on the parent's books.
• E) the amount of consolidated cost of goods sold.

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Definitions:

Hedge

An investment strategy used to offset potential losses or gains that may be incurred by a companion investment.

Long Position

Holding an asset or security with the expectation that it will increase in value over time, reflecting an investment strategy based on anticipated price growth.

Treasury Bonds

Long-term government securities issued by the U.S. Treasury with a maturity period typically between 20 to 30 years.

Interest Rate Futures

Financial derivatives that allow investors to bet on or hedge against future changes in interest rates.