If an investor company owns between 20% and 50% of the common stock of another business, cash dividends received from the investee company are generally recorded by the investor company by:

Question

Quizplus · Accepted Answer

When an investor company owns between 20% and 50% of another company's stock, it typically uses the equity method. Under this method, cash dividends received are recorded as a decrease in the investment account, reflecting a return of investment rather than income.

If an Investor Company Owns Between 20% and 50% of the Common