Asked by
Jorge MartineZ
on Oct 28, 2024
Verified
Barnum Company owns an investment and uses the equity method of accounting.Under the equity method of accounting,Barnum would decrease the Investment account for the proportionate share of the affiliate's reported net loss.
Equity Method
An accounting technique used to record investments in other companies where the investor has significant influence but does not fully control the company, typically 20%-50% ownership.
Proportionate Share
An individual's or entity's part or share of something in relation to the whole, usually expressed as a percentage.
- Acquire knowledge about the equity method in accounting and its impact on dividends and assessment of investments.
Verified Answer
OB
Learning Objectives
- Acquire knowledge about the equity method in accounting and its impact on dividends and assessment of investments.
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