Under the Equity Method of Accounting for Investments in Common

question 24

Multiple Choice

Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company

• A) the Dividend Revenue account is credited.
• B) the Stock Investments account is increased.
• C) the Stock Investments account is decreased.
• D) no entry is necessary.

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Definitions:

Court

An institution where legal disputes are resolved through the adjudication process by judges and sometimes juries.

Judge

An official appointed to decide cases in a court of law.

Conflict-Of-Interest

A situation in which a person or entity has competing interests or loyalties that can potentially interfere with the ability to make impartial decisions.

Ethical Rule

A guideline or standard that directs moral conduct within a specific profession, especially in law or medicine.