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Assume Company A accounts for its ownership of 2 5 % of Company B stock using the equity method of accounting. Which of the following
Assume Company A accounts for its ownership of of Company B stock using the equity method of accounting. Which of the following is the most accurate summary of how this investment will be treated in Company As financial statements?
Company A will include not just its own sales, expenses, assets etc., but also of Company Bs sales, expenses, assets, etc.in the figures shown in its financial statements
The Company A balance sheet will show the interest in Company B as a single number, and the interest in Company Bs income will appear as one line in the income statement
Company A will show its investment in Company B at cost and will not reflect any earnings from this investment in the income statement.
Company A will show its investment in Company B at cost and will reflect any dividends received from this investment in the income statement.
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