The Equity Method Usually Is the Most Appropriate Method for Accounting

question 90

True/False

The equity method usually is the most appropriate method for accounting for investments of more than a 20 percent interest of another company's stock.

---

Definitions:

Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry as a whole.

Price of An Input

The cost associated with purchasing goods or services used in the production process.

Breaking Even

The point at which total revenues exactly equal total expenses, resulting in no net profit or loss.

Produce

To create or manufacture goods and services for consumer use, often involving a combination of raw materials, labor, and machinery.