Under the equity method, a receipt of cash dividends by the investor would

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The equity method involves reporting the investor's share of the investee's net income or loss as an increase or decrease to the investment account, rather than as dividend income. Therefore, receipt of cash dividends by the investor decreases the investment account, as it represents a return of a portion of the initial investment. This transaction does not impact total assets or liabilities in any way, and it does not directly impact stockholders' equity unless the investor chooses to recognize the decrease in the investment account as a realized gain or loss on the income statement.

Under the Equity Method, a Receipt of Cash Dividends by the Investor