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Lacey 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 June 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 
Lacey 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 June 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

When a company receives dividends on its marketable trading investments, it recognizes them as revenue. Therefore, the entry to record the receipt of the dividends would include a credit to Dividend Revenue for $1,500. None of the other options are correct as they do not reflect the nature of the transaction.

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