If 25% of the common stock of an investee company is purchased long term investment the appropriate method of accounting for the investment is: a. the cost method.
b. the equity method.
c. the preparation of consolidated financial statements.
d. determined by agreement with whomever owns the remaining 90% of the stock.

b. the equity method.

Explanation:

The equity method is used when the investor company will own approximately 20% to 50% of the common stock of the investee company. This method is used because the investor company will have significant influence over the actions taken by the investee company. The investee company will generally be considered an affiliate company, but not a subsidiary.

B. A business focuses on producing screens for phones instead of

manufacturing the entire phone.

Explanation:

Economic specialization means the production process in which the firm focused to produced in order to gain more degree of efficiency

So as per the given options, the option B is correct as the business if focused on producing the screens rather manufacturing the overall phone

Hence, all the other options are incorrect