The Three Methods of Accounting for Stock Investments Are the Market

Multiple Choice

The three methods of accounting for stock investments are the market value method, the consolidation method and the equity method. The appropriate method to use depends on the percentage of ownership. Which of the following statements is true?

A) When the percentages of ownership are less than 20%, 20%-50%, and greater than 50%, the consolidation method, equity method, and market value method should be used, respectively.
B) When the percentages of ownership are less than 20%, 20%-50%, and greater than 50%, the market value method, consolidation method, and equity method should be used, respectively.
C) When the percentages of ownership are less than 20%, 20%-50%, and greater than 50%, the equity method, market value method, and consolidation method should be used, respectively.
D) When the percentages of ownership are less than 20%, 20%-50%, and greater than 50%, the market value method, equity method, and consolidation method should be used, respectively.