Match each of the definitions that follow with the appropriate investment term (a-j).
-Appropriate method for accounting for small stock investments
A)Equity method
B)Parent company
C)Subsidiary company
D)Consolidated financial statements
E)Fair value
F)Unrealized gain or loss on investments.
G)Valuation allowance for investments
H)Dividend yield
I)Amortized cost
J)Cost method

Question

Quizplus · Accepted Answer

The cost method is the appropriate accounting method for small stock investments, typically used when the investing company has a passive interest (less than 20%) in the investee and does not exert significant influence over it.

Match Each of the Definitions That Follow with the Appropriate