Use of the equity method somewhat distorts earnings in the sense that income is recognized even though no cash may ever be received.

Name: Use of the equity method somewhat distorts earnings in the sense that income is recognized even though no cash may ever be received.
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Question

Quizplus · Accepted Answer

The equity method recognizes the investor's share of the earnings of the investee, even if no cash dividends are received. This can result in income being recognized without any corresponding receipt of cash.

Use of the Equity Method Somewhat Distorts Earnings in the Sense