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.

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Definitions:

Nonpersonal Selling

A promotional method using advertising, sales promotions, and other mass-market approaches to sell products, as opposed to direct, face-to-face sales.

Direct Marketing

A strategy involving direct communication with individual consumers to obtain an immediate response and cultivate lasting customer relationships.

Differentiate Products

The strategy of making a product stand out from its competitors by emphasizing its unique features or benefits.