Final answer:
The statement is generally true, as investments in unincorporated joint ventures are typically accounted for using the equity method when the investor has significant influence over the investee, which is often considered to be an ownership stake between 20% and 50%.
Step-by-step explanation:
The statement that an investor enterprise must use the equity method of accounting for an investment in an unincorporated joint venture is generally True. When an investor has significant influence over the investee, which usually occurs with a 20% to 50% ownership stake, they are required to use the equity method.
This accounting method allows the investor to reflect their share of the profits and losses of the joint venture in their financial statements.
Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the investor's share of the joint venture's earnings or losses and dividends received.
This process provides a more accurate representation of the investor's economic interest in the joint venture compared to other methods like the cost method or fair value method.
The statement is true.