When an Investor Uses the Equity Method to Account for Investments

question 120

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) Dividend income.
• B) A deduction from the investor's share of the investee's profits.
• C) A deduction from the investment account.
• D) A deduction from the stockholders' equity account, dividends to shareholders.

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Definitions:

P-value

The P-value is a statistical measure that helps determine the significance of results, indicating the probability of observing the given results by chance.

ANOVA

A statistical technique that assesses potential differences in a scale-level dependent variable by a nominal-level variable having two or more categories.

Electrical Engineer

A professional who designs, develops, and tests electrical equipment and systems, including electronics and power generation and distribution systems.

Resistance

The opposition offered by a body or substance to the passage through it of a steady current.