Under the Initial Value Method, When Accounting for an Investment

question 38

Multiple Choice

Under the initial value method, when accounting for an investment in a subsidiary,

• A) Dividends received by the subsidiary decrease the investment account.
• B) The investment account is adjusted to fair value at year-end.
• C) Income reported by the subsidiary increases the investment account.
• D) The investment account remains at initial value.
• E) Dividends received are ignored.

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Definitions:

Genotype

The genetic makeup of an organism, including all of its genes, as distinguished from its physical appearance.

Type O Blood

A blood group in the ABO system characterized by the absence of A and B antigens on red cells, making it a universal donor for red cell transfusion.

Alleles

Different forms of a gene that arise by mutation and are found at the same place on a chromosome, influencing the development of different traits or characteristics in an organism.

Mendel's Law

Principles established by Gregor Mendel defining the inheritance patterns of traits through generations, including the law of segregation and independent assortment.