When a company uses equity method to record its


Discussion questions - Develop brief answers to each of the following questions:

1. Where in the financial statement s are investment transactions reported?

2. What would cause an Allowance Short-Term Investments to Market account that has a negative (credit) balance at the beginning of the year to have a positive (debit) balance at the end of the year?

3. When a company uses the equity method to record its proportionate share of the income and dividends of a company in which it has invested, what are the cash flow effects?

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Accounting Basics: When a company uses equity method to record its
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