Under the Equity Method of Accounting for an Investment

question 79

Multiple Choice

Under the equity method of accounting for an investment

• A)Dividend Revenue is credited when dividends are received.
• B)an Unrealized Gain account is credited when the investee reports a profit.
• C)the investment account is credited when the investee reports a profit.
• D)the investment account is credited when dividends are received.

---

Definitions:

Inventory Items

Goods and materials that a business holds for the ultimate goal of resale or production.

Non-inventory Items

Items that a business sells but does not maintain in physical inventory, often including services and digital goods.

Services

Intangible products offered by businesses, such as consulting, repairs, or entertainment.

3-way Match

An accounting control process matching the purchase order, delivery note/packing slip, and invoice before making a payment to the supplier.