When an investor owns less than a majority of the voting stock of
another corporation, the accountant must judge when the investor can
exert significant influence. For the sake of uniformity, U.S. GAAP and
IFRS presume that significant influence exists at ownership of _____
or more of the voting stock of the investee. (Assume that management
does not have a contractual or other basis to demonstrate that
influence.)
Question 3
U.S. GAAP view investments of between 20 and 50 percent of the
voting stock of another company (unless evidence indicates that
significant influence cannot be exercised) as
Question 4
When an investor uses the equity method to account for investments in
common stock, cash dividends received by the investor from the
investee should be recorded as
Question 5
U.S. GAAP view investments of less than 20 percent of the voting stock
of another company as
Question 6
To avoid double counting P's investment in S, P must eliminate
Question 7
The equity method of accounting for an investment in the common
stock of another company should be used when the investment
Question 8
An intercompany transaction is a transaction between
Question 9
If the combined market value of trading securities at the end of the
year is less than the market value of the same portfolio of trading
securities at the beginning of the year, the difference should be
accounted for by
Question 10
Intercompany sales
Question 11
A minority, active investment is generally
Question 12