Under the equity method,
A)the receipt of dividends from the investee results in an increase in the investment account.
B)the receipt of dividends from the investee results in a credit to the Dividend Income account.
C)the receipt of dividends from the investee results in an increase in the investment account and a credit to the Dividend Income account.
D)the receipt of dividends from the investee reduces the carrying amount of the investment account.

Question

Quizplus · Accepted Answer

Under the equity method, the receipt of dividends from the investee reduces the carrying amount of the investment account, as dividends are considered a return on investment rather than income.

Under the Equity Method