Which of the Following Observations Is NOT Consistent with the Cost

question 5

Multiple Choice

Which of the following observations is NOT consistent with the cost method of accounting?

• A)Investee dividends from earnings since acquisition by investor are treated as reduction of investment.
• B)Investments are carried by the investor at historical cost.
• C)Differential is not amortized or written off.
• D)It is consistent with the treatment normally accorded noncurrent assets.

---

Definitions:

Incidental Information

Information that is acquired without deliberate intention or effort, often as a byproduct of another activity.

Mnemonics

Memory aids, especially those techniques that use vivid imagery and organizational devices.

Retention

The ability to keep or hold onto information or material learned over time.

Encoded Information

Data that has been converted into a form, using a code, that is not immediately understandable by someone who is not authorized to access it.