When the cost method of accounting for long-term investment in shares is employed,the receipt of a dividend on those shares is recorded as a credit to:
A) the investment asset.
B) dividend revenue.
C) dividend declared.
D) retained profits.

Question

Quizplus · Accepted Answer

The receipt of a dividend on long-term investment shares is recorded as a credit to dividend revenue. This revenue is recognized in the income statement and increases net income.

When the Cost Method of Accounting for Long-Term Investment in Shares