When an investor owns between 20% and 50% of the outstanding stock of another company,the ________ method is used to account for the stock investment.
A)fair value
B)equity
C)consolidated
D)available-for-sale

Question

Quizplus · Accepted Answer

When an investor owns between 20% and 50% of the outstanding stock of another company, the equity method is used to account for the stock investment. This method involves recording the investment at cost and then adjusting the value of the investment each period for the investor's share of the investee's net income or loss.

When an Investor Owns Between 20% and 50% of the Outstanding