Your company has purchased 30% of the outstanding stock of another company. It has been determined that your company can exert significant influence with 30% ownership through representation on the board of directors. To account for the investment you determine that:
A. the equity method of accounting should be used.
B. the financial statements should be consolidated.
C. according to GAAP 30% ownership is not considered sufficient ownership to exert significant influence.
D. the fair value method of accounting is the most appropriate method to use.