Under the Equity Method of Accounting for Long-Term Investments in Ordinary

question 107

Multiple Choice

Under the equity method of accounting for long-term investments in ordinary shares, when a dividend is received from the investee company,

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

---

Definitions:

Programmed Decision Making

Refers to decision-making processes that are routine and established, often automated or guided by fixed policies and rules.

Programmed Decision Making

Decision-making techniques that are routine or automated, used for dealing with common, predictable problems.

Ill-structured Problem

A problem lacking a clear goal, solution path, or expected solution, making it difficult to solve using conventional methods.

Organizational Hierarchy

A system in which people or groups are ranked one above the other according to status or authority within an organization.