Which of the Following Observations Is Consistent with the Equity

question 19

Multiple Choice

Which of the following observations is consistent with the equity method of accounting?

• A) Dividends declared by the investee are treated as income by the investor.
• B) It is used when the investor lacks the ability to exercise significant influence over the investee.
• C) It may be used in place of consolidation.
• D) Its primary use is in reporting nonsubsidiary investments.

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Definitions:

Individualistic Societies

Cultures where personal achievements and independence are valued over group goals and harmony, leading to a focus on individual rights and autonomy.

United States

A federal republic consisting of 50 states, a federal district, five major self-governing territories, and various possessions, known for its significant influence on world politics, economy, and culture.

Vietnam

A Southeast Asian country known for its beaches, rivers, Buddhist pagodas, and bustling cities.