Company A owns 40 percent of Company B and exercisessignificant influence over the management of Company B.Therefore, Company A uses what accounting method forreporting its ownership of stock in Company B?a. The consolidation method.b. The fair value method for available-for-sale securities.c. The equity method.d. The fair value method for trading securities

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
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Company A owns 40 percent of Company B and exercises
significant influence over the management of Company B.
Therefore, Company A uses what accounting method for
reporting its ownership of stock in Company B?
a. The consolidation method.
b. The fair value method for available-for-sale securities.
c. The equity method.
d. The fair value method for trading securities

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