Multiple Choice
Which of the following statements regarding the accounting for a common stock investment using the equity method is incorrect?
A) The equity method is used for investments of ownership between 20% and 50% of the outstanding voting stock when the investor has the ability to exert significant influence.
B) The investment account is increased by the proportionate share of affiliate net income.
C) The investment account is decreased by the proportionate share of affiliate dividends.
D) Investment income equals the proportionate share of affiliate dividends.
Correct Answer:
Verified
Correct Answer:
Verified
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