When the Equity Method of Accounting for Investments Is Used

question 167

Multiple Choice

When the equity method of accounting for investments is used by the investor, the amortization of additional depreciation due to differences between book values and fair values of investee assets on the date of acquisition:

• A) Reduces the investment account and increases investment revenue.
• B) Increases the investment account and increases investment revenue.
• C) Reduces the investment account and reduces investment revenue.
• D) Increases the investment account and reduces investment revenue.

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Definitions:

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