Under the equity method of accounting for stock investments, the Investment account is decreased for the receipt of a dividend because:

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The equity method is used when an investor has significant influence over an investee but doesn't have control. Under this method, changes in the investee's owners' equity are reflected in the investment's account. When the investee pays a dividend, it reduces its owners' equity, which reduces the investor's investment under the equity method. Therefore, the Investment account is decreased for the receipt of a dividend. Option A is incorrect because even though no cash is received, the dividend affects the value of the Investment account. Option C is incorrect because it suggests that the dividend increases the investor's investment while it actually does the opposite. Lastly, option D is incorrect because the Investment account is indeed affected by the dividend payment.

Under the Equity Method of Accounting for Stock Investments, the Investment