Asked by Alexa Warson on Jul 15, 2024
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Which of the following is the correct matching concerning the appropriate accounting for long-term stock investments? % of Investor Ownership ‾ Accounting Guidelines ‾\begin{array}{llcc} \underline{ \text {\( \% \) of Investor Ownership }} & \underline{ \text { Accounting Guidelines }} \\\end{array}% of Investor Ownership Accounting Guidelines
A) Less than 20% Cost method \begin{array}{ll}\text { Less than } 20 \% &&&&& \text { Cost method } \\\end{array} Less than 20% Cost method
B) Between 20%−50% Cost method \begin{array}{ll}\text { Between } 20 \%-50 \% && \text { Cost method } \\\end{array} Between 20%−50% Cost method
C) More than 50% Cost or equity method \begin{array}{ll}\text { More than } 50 \% &&&& \text { Cost or equity method } \\\end{array} More than 50% Cost or equity method
D) Between 20%−50% Consolidated financial statements \begin{array}{ll}\text { Between } 20 \%-50 \% && \text { Consolidated financial statements }\end{array} Between 20%−50% Consolidated financial statements
Investor Ownership
A form of equity representing an individual's or entity's ownership stake in a company, as evidenced by stock or similar securities.
Accounting Guidelines
Established principles and standards that govern financial reporting and bookkeeping practices.
Cost Method
A method of accounting where the investment is recorded at its acquisition cost, without subsequent change to market value.
- Choose the fitting accounting practice, whether it is cost or equity, according to the degree of ownership and power.
Verified Answer
Learning Objectives
- Choose the fitting accounting practice, whether it is cost or equity, according to the degree of ownership and power.
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