Which of the Following Statements Regarding the Accounting for a Common

question 57

Multiple Choice

Which of the following statements regarding the accounting for a common stock investment using the equity method is incorrect?

• A)The equity method is used for investments of ownership between 20% and 50% of the outstanding voting stock when the investor has the ability to exert significant influence.
• B)The investment account is increased by the proportionate share of affiliate net income.
• C)The investment account is decreased by the proportionate share of affiliate dividends.
• D)Investment income equals the proportionate share of affiliate dividends.

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Definitions:

Software

Programs and operating information used by computers to perform tasks or solve problems.

Hardware

The physical components and tangible equipment that make up a computer system or other electronic device.

Symbolic Racists

Individuals who believe they are not prejudiced but hold negative attitudes towards a racial or ethnic group based on cultural or behavioral stereotypes rather than overt racial biases.

Prejudiced

Holding preconceived opinions or judgments about someone or something without proper knowledge or experience, often negative and directed towards specific groups.