the Stock Investments account is credited 1. If a company acquires a 40% common stock interest in another company, a. the equity method is usually applicable. b. all influence is classified as controlling. c. the cost method is usually applicable. d. the ability to exert significant influence over the activities of the investee does not exist. 2. If a common stock investment is sold at a gain, the gain a. is reported as operating revenue. b. is reported under a special section, “Discontinued investments,” on the income statement. c. is reported in the Other revenues and gains section of the income statement. d. contributes to gross profit on the income statement. 3. If the equity method is being used, cash dividends received a. are credited to Dividend Revenue. b. require no entry because investee net income has already been recorded at the proper proportion on the investor’s books. c. are credited to the Stock Investments account. d. are credited to the Revenue from Stock Investments account. 4. If the equity method is being used, the Revenue from Stock Investments account is a. just another name for a Dividend Revenue account. b. credited when dividends are declared by the investee. c. credited when net income is reported by the investee. d. debited when dividends are declared by the investee. 5. Under the equity method, the Stock Investments account is credited when the a. investee reports net income. b. investee reports a net loss. c. investment is originally acquired. d. investee reports net income and when the investment is originally acquired. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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