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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Definitions:

Social Problems

Issues within a society that affect individuals and communities, often requiring collective solutions.

Independence

The condition or quality of being self-reliant and free from external control or support, often associated with nations, individuals, or thoughts.

Maturity

The state of being fully developed in the body or the mind, or the state of being ready for something.

Social Learning Theory

A hypothesis proposing that individuals acquire knowledge through watching, copying, and emulating each other.