An investor records its share of its investee's income as a separate source of income because:
A)The investor has a controlling interest in its investee.
B)The investor has a passive interest in its investee.
C)The investor has an influential interest in its investee.
D)The investor has an active interest in its investee.

Question

An investor records its share of its investee's income as a separate source of income because:
A)​The investor has a controlling interest in its investee.
B)​The investor has a passive interest in its investee.
C)​The investor has an influential interest in its investee.
D)​The investor has an active interest in its investee.

Quizplus · Accepted Answer

An investor records its share of its investee's income as a separate source of income when it has a passive interest in its investee, which means it has a minority interest in the investee and does not have the ability to control its operations or make significant decisions. In this case, the investor records its share of the investee's income as a separate source of income on its financial statements.

An Investor Records Its Share of Its Investee's Income as a Separate