Under the equity method, the Share Investments account is increased when the

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Under the equity method, the Share Investments account is increased when the investee company reports net income. This is because the equity method requires that the investor recognize its share of the investee's profits or losses in its own income statement. As a result, when the investee reports net income, the investor recognizes its share of that income in the Share Investments account, which increases its balance.

Under the Equity Method, the Share Investments Account Is Increased