When an Investor Uses the Equity Method to Account for Investments

question 96

Multiple Choice

When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as

• A)an increase in the investment account.
• B)a deduction from the investment account.
• C)dividend revenue.
• D)a deduction from the investor's share of the investee's profits.
• E)None of these answer choices is correct.

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Definitions:

Surgical Removal

The process of excising or cutting out tissue, organs, or other structures from the body, typically as part of treatment for diseases or conditions.

Uterus

A muscular organ in the female reproductive system where a fertilized egg develops into a fetus.

Coiled Tube

A tube that is wound in a series of circular turns used in various applications, such as in heating or cooling systems.

Spermatids

Immature male gametes that form from the division of secondary spermatocytes during spermatogenesis in the testes.