Under the equity method of accounting for an investment, an investor recognizes its share of earnings in the period in which the investee declares a dividend.

Question

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Under the equity method, an investor recognizes its share of the investee's earnings in the period in which they are earned, regardless of whether a dividend is declared or not. The investor's share of dividends declared by the investee is recognized as dividend income in the period in which the dividend is declared.

Under the Equity Method of Accounting for an Investment, an Investor