9-2 If Company A accounts for its investment in Company B using the equity method, then a portion of Company Bs earnings are reported on Company As income statement.

Answer: True / False

Topic: Equity Method

9-3 Under the equity method, fair-value changes in the investee companys stock are not reflected in the investors accounting records.

Answer: True / False

Topic: Significant Influence

9-4 Regardless of the legal agreements, technology licensing, and the like between two companies, significant influence is determined by ownership of a sufficient percentage of outstanding common stock. This is called the significance influence test.

Answer: True / False

Topic: Equity Method

9-5 Dividends received from an investee company are reported as investment income by the investor company when the investor does not control the investee.

Answer: True / False