When Is the Equity Method Used to Account for Long-Term

question 82

Multiple Choice

When is the equity method used to account for long-term investments in common stock?

• A)When the investment is between 20% and 50% of the voting stock, regardless of whether or not significant influence can be achieved.
• B)When the investment is greater than 50% of the voting stock, regardless of whether or not significant influence can be achieved.
• C)When the investment is greater than 50% of the voting stock and significant influence can be achieved.
• D)When the investment is between 20% and 50% of the voting stock and significant influence can be achieveD.The equity method of accounting is used when an investment is between 20% and 50% of the voting stock of an affiliate and significant influence has been achieved.

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Definitions:

Free Radicals

Highly reactive molecules with unpaired electrons, capable of causing cellular damage and contributing to disease processes.

Electrons

Subatomic particles with a negative charge, orbiting the nucleus of an atom and involved in chemical reactions and electricity.

Temperature

An indicator of how hot or cold an object or substance is, compared to a baseline value.

Molecular Motion

The random movement of molecules in matter due to their kinetic energy; this motion increases with temperature.