A company that owns between 20% and 50% of the common stock of another business recognizes revenue from the investment when:

Question

Quizplus · Accepted Answer

When a company owns between 20% and 50% of the common stock of another business, it is considered an equity method investment. Under the equity method, revenue is recognized when the investee company recognizes net income. Therefore, option C is the correct answer. Options A and B are incorrect because they do not reflect the equity accounting approach used when a company holds a significant but not controlling interest in another company.

A Company That Owns Between 20% and 50% of the Common