Lomax Corporation Declares and Distributes a Cash Dividend That Is

question 22

Multiple Choice

Lomax Corporation declares and distributes a cash dividend that is a result of current earnings. How will the receipt of those dividends affect the investment account of the investor under each of the following accounting methods? Fair Value Method      Equity Method

• A) No Effect No Effect
• B) Decrease No Effect
• C) No Effect Decrease
• D) Increase Decrease

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Definitions:

Expenses

Costs incurred in the process of earning revenue, including operational, administrative, and selling activities.

Cash

Money in the form of currencies that can be used immediately for transactions or as a medium of exchange.

Disinfection

The process of eliminating or reducing harmful microorganisms from surfaces or objects, to prevent infection.

Surgical Asepsis

Techniques used to maintain a sterile environment and prevent infection during surgical procedures.