Match the following terms with the appropriate definitions.
-An accounting method for long-term investments in equity when the investor has significant influence over the investee.
A)Available-for-sale securities
B)Equity method
C)Parent company
D)Consolidated financial statements
E)Long-term investments
F)Unrealized gain (loss)
G)Trading securities
H)Return on total assets
I)Subsidiary
J)Held-to-maturity securities

Question

Quizplus · Accepted Answer

The equity method is used when an investor has significant influence over the investee, typically indicated by owning 20% to 50% of the voting stock. This method allows the investor to record their share of the investee's profits and losses.

Match the Following Terms with the Appropriate Definitions