If the Equity Method Is Used to Account for a Long-Term

question 148

Multiple Choice

If the equity method is used to account for a long-term investment in common stock,cash dividends received from the investee are recorded by the investor as:

• A)a debit to Equity-Method Investment and a credit to Equity-Method Investment Revenue.
• B)a debit to Cash and a credit to Dividend Revenue.
• C)a debit to Dividend Receivable and a credit to Dividend Revenue.
• D)a debit to Cash and a credit to Equity-Method Investment

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Wisdom

The ability to think and act using knowledge, experience, understanding, common sense, and insight.

Competence Stage

A phase in the learning process or skill development where an individual gains the ability to perform tasks effectively, yet requires conscious effort to execute.

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Involved in an activity or by being fully committed or occupied; it can also refer to the condition of being formally promised in marriage.

Management

The process of planning, organizing, directing, and controlling resources effectively to achieve desired objectives.