An Investor Holds 1% of the Outstanding Stock of an Investee.The

question 73

Multiple Choice

An investor holds 1% of the outstanding stock of an investee.The investor plans to hold the stock for a long time.The investor reports the dividends received from the stock as ________.

• A) an increase in the investment account
• B) a decrease in the investment account
• C) dividend revenue on the income statement
• D) equity in earnings of the investee on the income statement

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Definitions:

Attachment

The legal process of seizing property to secure the satisfaction of a judgment.

Securitization

The process of bundling securities and then selling them to big investors.

Balloon-Payment Mortgage

A balloon-payment mortgage is a type of loan that features low initial payments but ends with a large lump-sum payment due at the end of the mortgage term.

Fixed Payments

Regular, equal amounts paid over a specified period until the total amount of debt is paid off.