The equity method should generally be used to account for an investment in stock when the level of ownership is
A) less than 10%.
B) between 10% and 20%.
C) between 20% and 50%.
D) 10% or more.

Question

Quizplus · Accepted Answer

The equity method should generally be used to account for an investment in stock when the level of ownership is between 20% and 50%. This is because at this level, the investor has significant influence over the investee's operations and financial decisions.

The Equity Method Should Generally Be Used to Account for an Investment