If a Company Owns More Than 20% of the Shares

question 99

Multiple Choice

If a company owns more than 20% of the shares of another company and these shares are 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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