Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company
A) the Dividend Revenue account is credited.
B) the Stock Investments account is increased.
C) the Stock Investments account is decreased.
D) no entry is necessary.

Question

Quizplus · Accepted Answer

Under the equity method, dividends received from the investee decrease the carrying amount of the investment, so the Stock Investments account is decreased.

Under the Equity Method of Accounting for Investments in Common