If an investor company is adjusting its investment account each period by their share of the investee's net income less dividends declared, what method of accounting for its investment is it using?

Question

Quizplus · Accepted Answer

The method described is known as equity accounting, where the investor company adjusts its investment account based on its share of the investee's net income less dividends declared. This method is used when the investor has significant influence but not control over the investee.

If an Investor Company Is Adjusting Its Investment Account Each