Armando Company owns 17,000 of the 70,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the

A) equity method
B) market method
C) cost or market method
D) cost method

Equity Method

An accounting method used to record investments in other companies, where the investment's value is adjusted based on the investor's share of the investee's profit or loss.

Common Stock

A type of equity ownership in a corporation, representing a claim on part of the company's assets and earnings.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity without controlling it.