Use the following information to answer questions
Wells Inc.reported these transactions relating to marketable trading investments intended to generate profits and to be sold in the near term:

-The entry to record the receipt of the dividends on Jun 1 would include a
A)debit to Trading Investments for $1,500.
B)debit to Dividend Revenue for $1,500.
C)credit to Dividend Revenue for $1,500.
D)credit to Strategic Investments for $1,500.

Question

Use the following information to answer questions 
Wells Inc.reported these transactions relating to marketable trading investments intended to generate profits and to be sold in the near term:
 
-The entry to record the receipt of the dividends on Jun 1 would include a
A)debit to Trading Investments for $1,500. 
B)debit to Dividend Revenue for $1,500. 
C)credit to Dividend Revenue for $1,500. 
D)credit to Strategic Investments for $1,500.

Quizplus · Accepted Answer

Since the investments are marketable trading investments intended to generate profits and to be sold in the near term, the receipt of dividends would be recorded as revenue and not as an increase in the value of the investment. Therefore, the entry would include a credit to Dividend Revenue for the amount received, which is $1,500 in this case.

Use the Following Information to Answer Questions