When Applying the Rules of the Equity Method,the Equity Investments

question 139

Multiple Choice

When applying the rules of the equity method,the Equity Investments account is credited for the receipt of a cash dividend because ________.

• A) the dividend decreases the investor's investment
• B) the dividend is treated as earnings rather than a return of capital
• C) there is a decrease in the dividend liability
• D) the dividend increases the total assets

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Definitions:

Binomial Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent states across a number of trials.

Binomial Probability Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or assumptions.

Discrete Probability

Discrete probability involves probability distributions that deal with discrete random variables, which are variables that have specific, countable outcomes, such as rolling a die or flipping a coin.

Binomial Experiment

A statistical experiment that meets the criteria of having a fixed number of trials, each with two possible outcomes, independent trials, and a constant probability of success.