a) A company owns 60% of the stock of the subsidiary company. As such the investor-investee companies represents a parent-subsidiary relationship. Under GAAP, the investment should be accounted for using the consolidation method. The rationale for this method is full disclosure and consistency. (True/False)

11) Cash dividends paid on common stock do not have an affect on EPS. (True/False)

12) Under the equity method, cash dividends received on common stock is a source of revenue. (True/False)