When Using the Equity Method, Receipt of Cash Dividends Increases

question 141

True/False

When using the equity method, receipt of cash dividends increases the carrying (book) value of an investment in equity securities.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much revenue is contributing to fixed expenses and profit.

Labor Hours

A measure of the amount of work or effort in terms of hours spent by workers in producing goods or providing services.

Profitable Use

The utilization of resources or assets in a way that generates a financial gain.

Fixed Manufacturing Overhead

Costs in manufacturing that do not vary with the level of production, such as salaries of supervisors and rent of the factory.