Only dividends that have been paid in cash should be deducted from the investment account.

Question

Quizplus · Accepted Answer

Dividends received from an investment can be in the form of cash or stock, and the treatment depends on the accounting method used (e.g., cost method or equity method). Under the equity method, dividends received typically reduce the carrying amount of the investment, regardless of whether they are paid in cash or as stock dividends.

Only Dividends That Have Been Paid in Cash Should Be