If the cost method is used to account for an investment in stock, the Stock Investments account is increased by the amount of dividends received during the period.

Name: If the cost method is used to account for an investment in stock, the Stock Investments account is increased by the amount of dividends received during the period.
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Under the cost method, dividends received are recorded as dividend income, not as an increase in the Stock Investments account.

If the Cost Method Is Used to Account for an Investment