If the equity method is being used the Revenue from Stock Investments account is
A) just another name for a Dividend Revenue account.
B) credited when dividends are declared by the investee.
C) credited when net income is reported by the investee.
D) debited when dividends are declared by the investee.

Question

Quizplus · Accepted Answer

Revenue from Stock Investments account represents the investor's share of the investee's net income. Therefore, it is credited when net income is reported by the investee, as per the equity method of accounting. Dividend revenue is recorded separately, and is not the same as Revenue from Stock Investments account.

If the Equity Method Is Being Used the Revenue from Stock