The cost method of accounting for long-term investments in stock should be employed when the

A) investor owns more than 50% of the investee's stock.
B) investor has significant influence on the investee and the stock held by the investor are marketable equity securities.
C) market value of the shares held is greater than their historical cost.
D) investor's influence on the investee is insignificant.

Cost Method

An accounting method used to value inventory or investments, where the cost of the goods or the investment purchase price is the basis for the value on the balance sheet.

Long-term Investments

Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) long-term assets, such as land and buildings, not currently being used in operations.

Marketable Equity Securities

Shares of publicly traded companies that can be bought or sold on stock exchanges or other financial markets.