I have a homework question that I'm kind of confused about.

The cost method of accounting for investments :

a. requires the investment to be reported at its market value

b. requires the investment to be reported at its original cost in the balance sheet

c. requires the investment to be decreased by the reported net income of the investee

d. requires the investment be increased by the reported net income of the investee



Our book only has one small paragraph about the cost method. Any help would be greatly appreciated.

Cost accounting - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Cost_accounting)

There's a lot more info there to help you with your question.