The balance in the investment account on the parent's books varies between the equity method, initial value method, and the partial equity methods. The equity method is also referred to as the complete equity method, or the full equity method.

The Cost method is used when investor does not exercise significant influence.

The equity method is used to account for investments if significant influence can be exercised by the investor over the investee.

Equity Multiplier = 2.4

Therefore Equity Ratio = 1/EM

Equity Ratio = 1/2.4 = 0.42

MEMORIZE this formula:

Debt Ratio + Equity Ratio = 1

Therefor Debt Ratio = 1 - Equity Ratio = 1 - 0.42 = 0.58 or 58%

the stock investments account is debited at acquisition under both the equity method and cost method of accounting for investments in common stock

The home equity loan is a way to release the equity of your home in order to borrow money. A line of credit is a phrase used for a method of obtaining credit.