Exam #2 Multiple Choice Exam Preparation Questions - 100 questions ! 40 of these questions will be on your test ! 10 multiple choice questions from...

Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2010, Cosby had netearnings of $300,000 and paid dividends of $30,000. Judd mistakenly recorded thesetransactions using the fair value method rather than the equity method of accounting. Whateffect would this have on the investment account, net income, and retained earnings,respectively?A) Understate, overstate, overstateB) Overstate, understate, understateC) Overstate, overstate, overstateD) Understate, understate, understate