Forest Ltd

question 25

Multiple Choice

Forest Ltd. accounts for its investment in Leeds Co. using the cost method. During the year, Forest received $10,000 in dividends from Leeds. How should Forest report these dividends on its separate-entity financial statements?

• A)As an increase to the "Investment in Leeds Co." account on its statement of financial position
• B)As a decrease to the "Investment in Leeds Co." account on its statement of financial position
• C)As dividend income on its statement of changes in equity-retained earnings section
• D)As dividend income in its statement of comprehensive income

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Definitions:

Identity

The sense of self, encompassing personal, social, and cultural identities and how these are expressed and perceived.

Intimacy

In Erikson’s theory, the ability to form close, loving relationships; a primary developmental task in young adulthood.

Competence

The ability to do something successfully or efficiently, often measured against a standard.

Autonomy

The ability or right of individuals to make their own choices and decisions independently, free from external influence or coercion.