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 requires that the investor record its share of the investee's earnings as part of its investment balance. When the investee declares and pays a dividend, its owners' equity decreases, which in turn decreases the investor's share of ownership in the investee. Therefore, the Investment account is decreased for the receipt of a dividend.

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