Which of the following statements best describes the difference between the equity method and consolidation accounting?

• A. The equity method and consolidation are used interchangeably regardless of influence.
• B. The equity method is used when there is significant influence, while consolidation is used when there is controlling influence.
• C. Both the equity method and consolidation are used when there is no influence.
• D. The equity method is used when there is controlling influence, while consolidation is used when there is significant influence.

Answer: (B)