What is included in the journal entry required to record the receipt of dividends under the fair value method of accounting for investments?

Question

Quizplus · Accepted Answer

Under the fair value method of accounting for investments, the receipt of dividends is recorded as a credit to the investment account and a credit to dividend income. Therefore, choice (C) - credit to dividend income - is the correct answer. Choices (A) and (D) are incorrect as they do not reflect the proper account to be credited when recording dividends received under the fair value method. Choice (B) is incorrect as it involves debiting the dividend account which is not necessary when recording dividends received under the fair value method.

What Is Included in the Journal Entry Required to Record