Under the equity method of accounting for an investment
A) Dividend Revenue 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, dividends received from the investee reduce the carrying amount of the investment, so the Investment account is credited when dividends are received.

Under the Equity Method of Accounting for an Investment