Which of the Following Results in an Increase in the Investment

question 98

Multiple Choice

Which of the following results in an increase in the investment account when applying the equity method?

• A) Investor's share of gross profit from intra-entity inventory sales for the prior year.
• B) Investor's share of gross profit from intra-entity inventory sales for the current year.
• C) Dividends paid by the investor.
• D) Dividends paid by the investee.
• E) Sale of a portion of the investment during the current year.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.

Statement of Income

A financial report summarizing the revenues, expenses, and profits/losses of a company over a specified period, also known as an income statement.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used to prepare financial statements.