Accounting for long-term investments in equity securities with controlling influence uses the:
A)Controlling method.
B)Equity method with consolidation.
C)Investor method.
D)Investment method.
E)Consolidated method.

Question

Quizplus · Accepted Answer

The equity method with consolidation is the appropriate choice for accounting for long-term investments in equity securities with controlling influence. This method involves consolidating the financial statements of the investing company and the investee company, and recognizing the investor's share of the investee's income, assets, and liabilities. The controlling influence of the investor is reflected in the consolidation process, which allows for a more accurate representation of the financial position and performance of both companies.

Accounting for Long-Term Investments in Equity Securities with Controlling Influence