Under the Cost Method Dividends Received from an Investee Company

question 182

Short Answer

Under the cost method dividends received from an investee company are credited to the _______________ account whereas under the equity method dividends received from an investee company are credited to the _______________ account.

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Definitions:

Matching Concept

An accounting principle that dictates expenses should be matched with the revenues they help to generate within the same accounting period.

Clearinghouse Collection Fee

A charge levied by a clearinghouse for handling the processing and settlement of transactions between financial institutions.

Credit Card Sales

Transactions in which customers use credit cards to pay for goods or services, creating a receivable for the seller until payment is processed by the card issuer.

Summary Journal Entry

A consolidated record that summarizes multiple transactions into a single entry within the accounting records.