The equity method of accounting should be used when the parent company owns 100% of the voting stock in its subsidiaries.

Question

Quizplus · Accepted Answer

The equity method of accounting should be used when the parent company has significant influence, but not necessarily 100% ownership, over its subsidiaries. Under the equity method, the parent company records its share of the subsidiary's net income or loss on its own financial statements.

The Equity Method of Accounting Should Be Used When the Parent