A minority , active investment is generally Question 2 An intercompany transaction is a transaction between Question 3 Minority , passive investments are initially recorded at the Question 4 To avoid double counting P ' s investment in S , P must eliminate Question 5 For which type of investments would unrealized increases and decreases be recorded directly in an owners ' equity account ? Question 6 Intercompany sales Question 7 U . S . GAAP and IFRS require firms to account for minority , active investments , using the _____ method . Question 8 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 9 Consolidated financial statements are typically prepared when one company has Question 10 U . S . GAAP view investments of less than 20 percent of the voting stock of another company as Question 11 U . S . GAAP and IFRS require firms to account for business combinations using the _____ method . Question 12 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