Which of the following accounting methods is used to account for controlling interest investments?

Question

Quizplus · Accepted Answer

The consolidation method is used to account for controlling interest investments because it involves combining the financial statements of the parent company and its subsidiaries to create a single set of financial statements. This method is used when the parent company owns more than 50% of the voting shares of the subsidiary and has control over its operations. The equity method is used when the parent company has significant influence over the subsidiary but does not have control, and the acquisition method is used when the parent company acquires a controlling interest in the subsidiary through a purchase transaction. The discounted cash flow method is used to value investments but is not specific to controlling interest investments.

Which of the Following Accounting Methods Is Used to Account