Asked by
Urskin Winston
on Oct 28, 2024
Verified
When an investment accounted for under the equity method is sold,the gain or loss reported on the income statement is the difference between the selling price and the original cost of the investment.
Equity Method
A financial accounting approach for assessing investments in which an investor has significant influence over an associate, reflecting share in profits or losses.
Selling Price
The amount for which a good or service is sold to the customer.
- Understand the application of the equity method in accounting and its effects on dividend payments and the valuation of investments.
- Differentiate between actual and potential gains and losses, and their influence on accounting statements.
Verified Answer
MJ
Learning Objectives
- Understand the application of the equity method in accounting and its effects on dividend payments and the valuation of investments.
- Differentiate between actual and potential gains and losses, and their influence on accounting statements.
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