Under the equity method of accounting for investments, an investor recognizes its share of the earnings in the period in which the
A) investor sells the investment.
B) investee declares a dividend.
C) investee pays a dividend.
D) earnings are reported by the investee in its ﬁnancial statements.

Question

Quizplus · Accepted Answer

Under the equity method of accounting for investments, an investor recognizes its share of the earnings in the period in which the earnings are reported by the investee in its financial statements, not when dividends are declared or paid, or when the investment is sold.

Under the Equity Method of Accounting for Investments, an Investor