If a Company Owns More Than 20% of the Stock

question 12

Multiple Choice

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment,which method would the investor normally use to account for this investment?

• A)Equity method.
• B)Fair value method.
• C)Historical cost method.
• D)Cost with amortization method.
• E)Effective method.

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Definitions:

Ulnar Artery

A major artery of the forearm that supplies blood to the flexor muscles of the hand and medial aspect of the forearm.

Right Ventricular Systole

The phase of the cardiac cycle during which the right ventricle of the heart contracts and pumps deoxygenated blood into the pulmonary arteries leading to the lungs.

Pulmonary Trunk

The major blood vessel that carries blood from the right ventricle of the heart to the lungs for oxygenation.

Pulmonary Veins

The veins that return oxygenated blood from the lungs to the left atrium of the heart, unlike most veins which carry deoxygenated blood.