When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as

Question

Quizplus · Accepted Answer

When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as a deduction from the investment account, as it reduces the value of the investment in the investee. Therefore, option B is the correct choice.

When an Investor Uses the Equity Method to Account for Investments