If the equity method is being used, cash dividends received
A) are credited to the Dividend Revenue account.
B) require no entry because investee net income has already been recorded at the proper proportion on the investor's books.
C) are credited to the Stock Investments account.
D) are credited to the Revenue from Investment in Stock account.

Question

Quizplus · Accepted Answer

Under the equity method, cash dividends received are considered a return of investment and are credited to the Stock Investments account, reducing the carrying amount of the investment.

If the Equity Method Is Being Used, Cash Dividends Received