Revenue is recognized when cash dividends are received 1. Which of the following would not be considered a motive for making a stock investment in another corporation? a. Appreciation in the market value of the stock investment b. Use of the investment for expanding its own operations c. Use of the investment to diversify its own operations d. An increase in the amount of interest revenue from the stock investment 2. Revenue is recognized when cash dividends are received under a. the controlling interest method. b. the cost method. c. the equity method. d. both the cost and equity methods. 3. Which of the following is the correct matching concerning an investor’s influence on the operations and financial affairs of an investee? % of Investor Ownership Presumed Influence a. Less than 20% Short-term b. Between 20%-50% Significant c. More than 50% Long-term d. Between 20%-50% Controlling 4. Which of the following is the correct matching concerning the appropriate accounting for long-term stock investments? % of Investor Ownership Accounting Guidelines a. Less than 20% Cost method b. Between 20%â€“50% Cost method c. More than 50% Cost or equity method d. Between 20%â€“50% Consolidated financial statements 5. If the cost method is used to account for a long-term investment in common stock, a. it is presumed that the investor has significant influence on the investee. b. the earning of net income by the investee is considered a proper basis for recognition of income by the investor. c. net income of the investee is not considered earned by the investor until dividends are declared by the investee. d. the Investment account may be, at times, greater than the acquisition cost. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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