Assuming That Errant Uses the Cost Method, What Would Be

question 64

Multiple Choice

Assuming that Errant uses the Cost Method, what would be the journal entry to record the dividends received by Errant during the year?

• A)
• \[\begin{array} { | l | l | l | }
• \hline & \text { Debit } & \text { Credit } \\
• \hline \text { Cash } & \$ 9,000 & \\
• \hline \text { Investment in Grub } & & \$ 9,000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | l | l | }
• \hline & \text { Debit } & \text { Credit } \\
• \hline \text { Cash } & \$ 9,000 & \\
• \hline \text { Dividend Income } & & \$ 9,000 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | l | l | }
• \hline & \text { Debit } & \text { Credit } \\
• \hline \text { Cash } & \$ 9,000 & \\
• \hline \text { Acquisition Income } & & \$ 9,000 \\
• \hline
• \end{array}\]

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Definitions:

Demand Function

An illustrative model that displays the amount of a product buyers are prepared and capable of buying at different price levels.

Pumpkins

A plant belonging to the squash family, often used for food, decoration, or as commodities in agricultural markets.

Constant Marginal Cost

A situation where the cost of producing an additional unit of output is the same, regardless of the volume produced.

Inverse Demand

A mathematical function that expresses the price of a good or service as a function of the quantity demanded, showing how price changes with demand.