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When an Investor Uses the Equity Method to Account for Investments

Question 14

Multiple Choice

When an investor uses the equity method to account for investments in common stock,the investment account will be increased when the investor recognizes


A) a proportionate share of the net income of the investee.
B) a cash dividend received from the investee.
C) periodic amortization of an intangible arising from contractual rights acquired in the purchase.
D) depreciation related to the excess of market value over book value of the investee's depreciable assets at the date of purchase by the investor.

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