Pravis Corporation Owns 30% of Kuster Corporation

question 119

Multiple Choice

Pravis Corporation owns 30% of Kuster Corporation. Pravis Corporation received $9,000 in cash dividends from Kuster Corporation. The entry to record receipt of these dividends is:

• A) Debit Cash, $9,000; credit Interest Revenue, $9,000.
• B) Debit Cash, $9,000; credit Dividend Revenue, $9,000.
• C) Debt Long-Term Investment, $9,000; credit Cash, $9000.
• D) Debit Cash, $9,000; credit Long-Term Investments, $9,000.
• E) Debit Unrealized Gain-Equity, $9,000; credit Cash, $9,000.

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Definitions:

Implied Authority

Authority of an agent that is not explicitly granted but rather inferred from the nature of the job or previous conduct between the agent and the principal.

Partnership Property

Assets or property owned by a partnership, as opposed to personal property owned by the individual partners.

Nature Of The Business

Describes the fundamental operations and activities in which a business is engaged.

Allocation Of Losses

The process by which losses are distributed among various parties, such as insurance companies or individuals, often according to a pre-determined formula or agreement.