Which of the Following Results in a Decrease in the Investment

question 118

Multiple Choice

Which of the following results in a decrease in the investment account when applying the equity method?

• A) Dividends paid by the investor.
• B) Net income of the investee.
• C) Net income of the investor.
• D) Unrealized gain on intra-entity inventory transfers for the current year.
• E) Purchase of additional common stock by the investor during the current year.

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Definitions:

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.

Financial Misconduct

Unethical or illegal handling of financial affairs, typically involving fraud, embezzlement, or misappropriation of funds.

Corporate Executives

Senior management officials within a corporation responsible for making major decisions and overseeing the company's operations.

Kohlberg

A theorist known for his work on moral development, particularly the stages of moral reasoning.