Which of the Following Is Not True When the Fair

question 48

Multiple Choice

Which of the following is not true when the fair value option is elected for an investment that would normally be accounted for under the equity method?

• A)no journal entry need be made to recognize the investor's portion of the investee's net income.
• B)unrealized gains and losses on that investment are recognized in net income.
• C)no journal entry need be made to recognize the investor's portion of dividends paid by the investee.
• D)All of these are true.

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Definitions:

Pollution Authority

An organization or regulatory body responsible for controlling or reducing pollution to protect the environment.

Tradable Permits

A system where rights to emit pollution or other substances are given a market value and can be bought and sold.

Environmental Protection Agency

A U.S. federal agency responsible for creating and enforcing regulations to protect the environment and public health from pollution and hazardous substances.

Clean Air

The condition of the atmosphere when it is free from pollutants, contaminants, and other harmful substances.