When an investee is classified as an associate which method of accounting is used to account for the investment?
A) proprietary method
B) acquisition method
C) equity method
D) parent-entity method

Question

Quizplus · Accepted Answer

When an investee is classified as an associate, the equity method of accounting is used to account for the investment. Under this method, the investment is initially recorded at cost and subsequently adjusted for the investor's share of the associate's profits or losses, as well as any changes in other comprehensive income or equity. This method reflects the investor's influence over the associate, as the investor has significant influence but does not have control over the associate's operations.

When an Investee Is Classified as an Associate Which Method