If the Equity Method Is Being Used, the Revenue from Investment

question 10

Multiple Choice

If the equity method is being used, the Revenue from Investment in Stock account is

• A) just another name for a Dividend Revenue account.
• B) credited when dividends are declared by the investee.
• C) credited when net income is reported by the investee.
• D) debited when dividends are declared by the investee.

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Definitions:

Average Tax Rate

The fraction of an individual's total income that is paid in taxes, calculated by dividing the total taxes paid by total income.

Taxable Income

the amount of income used to determine how much tax an individual or a company owes to the government, after deductions and exemptions.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, representing the percentage of tax applied to your income for each tax bracket in which you qualify.

Taxable Income

The portion of an individual's or corporation's income that is subject to taxes according to the governing tax laws.