Which of the following statements is true if an investor owns more than 20% but less than 50% of the common shares of another corporation as an investment?

Question

Quizplus · Accepted Answer

Ownership of more than 20% but less than 50% of the common shares of another corporation generally indicates that the investor has significant influence over the investee. In such cases, the equity method is used to account for the investment. Consolidation is only required if the investor has control (i.e. owns more than 50% of the voting shares) over the investee. The cost method is used when the investor has no significant influence over the investee.

Which of the Following Statements Is True If an Investor