Under the equity method of accounting for an investment
A)Dividend Income is credited when dividends are received.
B)an Unrealized Gain account is credited when the investee reports net income.
C)the Investment account is credited when the investee reports net income.
D)the Investment account is credited when dividends are received.

Question

Quizplus · Accepted Answer

Under the equity method, when dividends are received, the Investment account is credited because the receipt of dividends reduces the carrying amount of the investment.

Under the Equity Method of Accounting for an Investment