Under the Partial Equity Method of Accounting for an Investment

question 48

Multiple Choice

Under the partial equity method of accounting for an investment,

• A) The investment account remains at initial value.
• B) Dividends received are recorded as revenue.
• C) The allocations for excess fair value allocations over book value of net assets at date of acquisition are applied over their useful lives to reduce the investment account.
• D) Amortization of the excess of fair value allocations over book value is ignored in regard to the investment account.
• E) Dividends received increase the investment account.

---

Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Variation

The occurrence of differences in characteristics, traits, or outcomes among individuals within a population, group, or process.

Statistically Significant

A term indicating that the likelihood a result happened by chance is low, often used in research to confirm the reliability of findings.

Variability

The degree to which data points in a statistical distribution or set diverge from the average value and from each other.