Truth and False a) A liability is recorded at the principle only and the interest is recognized as it is incurred with the passage of time. b) Individuals can participate in the ownership of a company by acquiring modest quantities of stock, which is a significant advantage over a sole proprietorship or partnership. c) The right to receive a fixed dividend rate when the board of directors distributes a dividend is one of the rights of common stockholders. d) long-term investment includes any investment that meet the criteria of a short-term investment and any investment that the investor expects to hold longer than a year or that is not readily marketable. e)he equity method is used to account for investments in which the investor holds 20 to 50% of the voting shares of the investee and may significantly influence the investee's actions.