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 3
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 4
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 5 An intercompany transaction is a transaction between Question 6
U. S. GAAP and IFRS require firms to account for minority, active investments, using the _____ method.
Question 7 To avoid double counting P ' s investment in S, P must eliminate Question 8
The equity method of accounting for an investment in the common stock of another company should be used when the investment