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company should use the equity method to account for an investment if O it has the ability to exercise significant influence over the operating policies of the investee. it owns 30% of another company's stock. it has a controlling interest (more than 50%) of another company's stock. O the investment was made primarily to earn a return on excess cash.

company should use the equity method to account for an investment if O it has the ability to exercise significant influence over the operating policies of the investee. it owns 30% of another company's stock. it has a controlling interest (more than 50%) of another company's stock. O the investment was made primarily to earn a return on excess cash.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company should use the equity method to account for an investment if O it has the ability to exercise significant influence over the operating policies of the investee. O it owns 30% of another company's stock.. O it has a controlling interest (more than 50%) of another company's stock. O the investment was made primarily to earn a return on excess cash.
Transcribed Image Text:A company should use the equity method to account for an investment if O it has the ability to exercise significant influence over the operating policies of the investee. O it owns 30% of another company's stock.. O it has a controlling interest (more than 50%) of another company's stock. O the investment was made primarily to earn a return on excess cash.
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