Which of the following is true with regard to how to account for company A's investment in company B's common stock?
A. The equity method is used when A owns from 20% to 50% of B.
B. Consolidated financial statements are prepared when A owns less than 20% of B.
C. The fair value method is used when A owns more than 50% of B.
D. All of the other answer choices are correct.
Answer: A
You might also like to view...
Indicate the group of words or sentence with correct capitalization. Which is correct?
A) The Adventures Of Huckleberry Finn by Mark Twain B) The Adventures of Huckleberry Finn by Mark Twain
A tree farm purchased new evergreen stock listing for $16,200 with a single trade discount of 
. What is the net cost of the evergreen stock?
What will be an ideal response?
Big Eggs, Inc agrees to supply Omelet Express with five hundred eggs. Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at? A)?1:00 P.M
B)?2:00 P.M. C)?3:00 P.M. D)?4:30 A.M.
Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that:
A. variable costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs while absorption costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs. B. variable costing treats only direct materials, direct labor, the variable portion of manufacturing overhead, and the variable portion of selling and administrative expenses as product cost while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs. C. variable costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs. D. variable costing treats only direct materials and direct labor as product cost while absorption costing treats direct materials, direct labor, and the variable portion of manufacturing overhead as product costs.