Question $23$

$0\mathrm{.}6$ points

Assume Company A accounts for its ownership of $25\%$ 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 A$\text{'}$s financial statements?

Company A will include not just its own sales, expenses, assets etc., but also $25\%$ of Company B$\text{'}$s 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 B$\text{'}$s 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.