Under the equity method, dividends received by the investor should be recorded as

Name: Under the equity method, dividends received by the investor should be recorded as
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Under the equity method, dividends received by the investor are considered returns on the investment and thus reduce the carrying value of the investment on the investor's books. This reflects the fact that the dividends decrease the investee's equity, which in turn decreases the value of the investor's share in the investee.

Under the Equity Method, Dividends Received by the Investor Should