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:

Specific Performance

An equitable remedy of the court that may be granted for breach of contract where money damages would be inadequate, and that requires the defendant to carry out the agreement according to its terms.

Possession

The state or fact of owning or having control over something, either physically or legally.

Full Payment

The complete settlement of an amount due, leaving no balance.

Assignment

The transfer of a debtor’s property to an Official Receiver under a voluntary assignment in bankruptcy.