The Equity Method Records the Initial Purchase of an Investment

question 77

Multiple Choice

The equity method records the initial purchase of an investment in voting common stock at _____. Each period, the investor treats as revenue its share of the _____ of the investee.The investor treats dividends declared by the investee as _____.

• A)acquisition cost; dividends; income
• B)acquisition cost; periodic earnings; a reduction of the investor's investment in stock of the investee account
• C)present value of future cash flows; dividends; a reduction of the investor's investment in stock of the investee account
• D)present value of future cash flows; periodic earnings; a reduction of the investor's investment in stock of the investee account
• E)future value of present cash flows; dividends; a reduction of the investor's investment in stock of the investee account

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Definitions:

Dark Red Blood

Indicates oxygen-depleted blood, often associated with venous blood or certain conditions causing altered blood coloration.

Spurts

Sudden and rapid bursts of growth, energy, activity, or the flow of a liquid.

Postmortem Examination

A postmortem examination, also known as an autopsy, is a detailed medical examination of a body after death to determine the cause and manner of death and to evaluate any disease or injury that may be present.

Coroner

An official who investigates a sudden, suspicious, or violent death to determine the cause. In some communities, this position has been replaced by the medical examiner.