CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Lewis Corporation has owned 75% of the common stock of Clark Corporation throughout the year. What is the proper balance sheet presentation for Lewis' investment at year-end?
A. The investment account will be presented in the noncurrent asset section of the balance sheet as available-for-sale securities.
B. The investment account will be eliminated, and consolidated financial statements will be presented.
C. The investment account will be presented in the noncurrent asset section of the balance sheet according to the equity method.
Explanation: Majority ownership situations requiring consolidation occur when a shareholder owns more than 50% of the stock of the corporation.

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