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

question 158

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 credit to the Investment account.
• B) a credit to the Dividend Revenue account.
• C) a debit to the Investment account.
• D) no entry. There is no entry made to record dividends.

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Definitions:

Physiological Needs

Fundamental human requirements for sustaining life, including air, water, food, shelter, and sleep, critical for survival.

Safety Needs

As identified by Maslow, these are the second level of human needs in his hierarchy, including personal and financial security, health, and well-being, and protection against accidents or harm.

Humanistic Approach

A psychological perspective emphasizing the study of the whole person and their uniqueness, focusing on their potential for personal growth.

Free Will

The concept that human beings have the power to make choices that are not determined by natural or divine forces.