If One Company Owns More Than 20% of the Shares

question 21

Multiple Choice

If one company owns more than 20% of the shares of another company and the shares are being held as a long-term investment,which method would normally be used to account for this investment?

• A) Equity.
• B) Fair value.
• C) Historical cost.
• D) Straight-line.
• E) EffectivE.

---

Definitions:

Supervisory Support

Assistance and guidance provided by supervisors or managers to their subordinates, typically aimed at encouraging well-being and improving performance.

Innovation

The process of creating, developing, and implementing new ideas, products, or methods that bring novel solutions to problems or improvements to existing conditions.

Creativity

The ability to generate new ideas, solutions, or innovations that are original and valuable.

Framing

The process of presenting or structuring information in a way that influences perception or decision-making.