When Using the Equity Method to Account for an Investment

question 94

Multiple Choice

When using the equity method to account for an investment, cash dividends received by the investor from the investee should be recorded:

• A) As a reduction in the investment account.
• B) As an increase in the investment account.
• C) As dividend income.
• D) As a contra item to stockholders' equity.

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Definitions:

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact by manipulating variables under controlled conditions.

Outcomes

The possible results that may occur from a random experiment or occurrence.

Selections

The process of choosing or selecting from a group of alternatives.

Individuals

Refers to the subjects or entities being studied in a statistical or research context.