A company should always use the equity method to account, Ask an Expert

Accounting

A company should always use the equity method to account for an investment if:

A. it has the ability to exercise significant influence over the operating policies of the investee.

B. it owns 30% of another company's stock.

C. it has a controlling interest (more than 50%) of another company's stock.

D. the investment was made primarily to earn a return on excess cash.

E. it does not have the ability to exercise significant influence over the operating policies of the investee.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M953978

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