In a Situation Where the Investor Exercises Significant Influence Over

question 33

Multiple Choice

In a situation where the investor exercises significant influence over the investee, which of the following entries is not actually posted to the books of the investor?
1) Debit to the Investment account, and a Credit to the Equity in Investee Income account.
2) Debit to Cash (for dividends received from the investee) , and a Credit to Dividend Revenue.
3) Debit to Cash (for dividends received from the investee) , and a Credit to the Investment account.

• A) Entries 1 and 2.
• B) Entries 2 and 3.
• C) Entry 1 only.
• D) Entry 2 only.
• E) Entry 3 only.

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Definitions:

Germany

A country in Central Europe, known for its rich history, cultural heritage, and as a key economic and political power in the European Union.

Comparative Advantage

is the ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Specialization And Trade

The economic practice where individuals or countries focus on producing specific goods or services and trade them for others, enhancing efficiency and productivity.

Production Possibilities

A model that shows the various combinations of outputs that a economy can produce, given its resources and technology.