Multiple Choice
Which one of the following statements is correct for an investor company?
A) The balance in the Investment in Osprey Co.account can be reduced to represent a decline in the fair market value of the investment,but will not be adjusted if the fair market value increases.
B) Under the equity method,the balance in the Investment in Osprey Co.account can be negative if the investee corporation operates at a loss.
C) Once the balance in the Investment in Osprey Co.is reduced to zero,it will not be reduced any further.
D) Under the equity method,the balance in the Investment in Osprey Co.account will increase when cash dividends are received.
Correct Answer:
Verified
Correct Answer:
Verified
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