Which of the Following Statements Is Correct

question 65

Multiple Choice

Which of the following statements is correct?

• A) When the equity method is used to account for an investment in an investee, the reported share of investee income must be added to net income on the statement of cash flows.
• B) When the equity method is used to account for an investment in an investee, the cash dividends received are cash inflow from investing activities.
• C) When the equity method is used to account for an investment in an investee, the reported share of investee dividends must be deducted from net income on the statement of cash flows.
• D) Any realized or unrealized gains or losses that were reported on the income statement under the market value method must be removed from net income in the operating activities section of the statement of cash flows.