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1. How should an investment in common stock accounted for using the equity method of accounting be presented in the balance sheet of the investor?

1. It should be presented as a single amount in the asset section of the investors balance sheet.
2. Each asset and liability acquired using the equity method of accounting should be separately presented on the balance sheet of the investor
3. The investment is presented in between the liabilities and equity section of the balance sheet of the investor.
4. The investment is presented in the balance sheet at its fair value as of the balance sheet date along with a note disclosure describing the fair value technique use

2. Which would not be considered an indication of significant influence over the operating and financial policies of an investee (you may be able to answer this question using a process of elimination of options or you may research the answer by using the FASB Codification)?

1. Representation on the board of directors.
2. A standstill agreement signed by both the investor and the investee.
3. Interchange of managerial personnel.
4. Technological dependency.

3. Which one of the following would be accounted for as a business acquisition? (You can answer this question using the FASB Codification, FASB ASC 805 if you are unsure about your response) ?

1. The acquisition of an asset or a group of assets that does not constitute a business.
2. A business combination between entities or businesses that are already under common control.
3. An acquisition of a for-profit business by a not-for-profit organization.
4. A 100% acquisition of a controlling interest in a company.

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